Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

INVERNESS HARBOUR (CITADEL QUAY ETC.) ORDER CONFIRMATION BILL

INVERNESS HARBOUR ORDER CONFIRMATION BILL

Considered; to be read the Third time tomorrow.

Oral Answers to Questions — EMPLOYMENT

Health and Safety

Mrs. Wise: asked the Secretary of State for Employment if he is satisfied with the operation of the Health and Safety at Work Act 1974.

The Under-Secretary of State for Employment(Mr. Harold Walker): I shall be satisfied with the operation of the Act when I am sure that all people at work—employers, employees and the self-employed—are taking all necessary measures for their own and others' health and safety.

Mrs. Wise: Will my hon. Friend reflect on the deterrent effect of a level of fines averaging £95 for successful prosecutions under the Act? Is he aware that in my constituency an accident took place recently, involving death which was caused by the employer's negligence, and that a fine of £200 was imposed? In addition, GEC—it was not GEC in the instance to which I first referred—was fined £300 on six serious summonses. Will my hon. Friend contrast that——

Mr. Speaker: Order.

Mr. Walker: I understand the disquiet of my hon. Friend. We are not responsible for the decision of the courts. The Act provides for unlimited fines on indictment as well as imprisonment for some offences. As I have said, I share the disquiet of my hon. Friend about the level of penalties imposed by the courts. I hope that the courts will heed the remarks made in the house.

Mr. Madel: Is the hon. Gentleman satisfied with the way in which companies are providing a written statement of health and safety policy to all their employees? Has the Health and Safety Commission had to remind many firms of this obligation under the Act?

Mr. Walker: This is one feature of the Act to which there has been a good response. Companies have got down to the task of preparing written statements and in many cases have published them. The Health and Safety Commission has produced guidance on what a written statement should contain. A feature of many of the statements that has caused me much anxiety is that they tend to over-emphasise the responsibilities of the employee and to underplay the responsibilities of the employer. I hope that we shall see a better balance in some of the statements when they are revised.

Mr. Bates: What is the full establishment of the Health and Safety Inspectorate, and is it yet filled? If not, what progress is being made towards filling it?

Mr. Walker: Without notice, I cannot give the full figures. The latest information is that 819 inspectors are in post in the Factory Inspectorate. That represents a 12 per cent. to 14 per cent. increase on the numbers in post when the health and safety at work legislation came before Parliament. We are keeping up to date with the proposed expansion of the inspectorate. We are pretty well on target.

Mr. Small: asked the Secretary of State for Employment if he will now extend the scope of the Health and Safety at Work Act to cover offshore installations and activities and if he will make a statement.

Mr. Harold Walker: This question is at present receiving urgent attention by


the Government and it is hoped that a statement will be made shortly.

Mr. Small: I would not call that a five-star answer. Does my hon. Friend recall the public indignation—indeed, the wave of indignation—in the trade union movement over the lack of health and safety provisions concerning our offshore installations and in the new technologies? It was thought necessary in 1974 to set up the inter-departmental study group. The study was a long time ago in history, and a week is a long time in politics. I should like an answer. I do not want to table the Question a second time. I am looking for action.

Mr. Walker: My hon. Friend is right to be impatient. This is a serious matter. I hope that he will have the chance to table a Question in the near future, in response to which I hope to be able to give him a five-star answer.

Mr. Henderson: Is the Minister aware that there is concern on both sides of the House about the lack of rights possessed by the people working on offshore installations? Indeed, some of my constituents have been dismissed under incredible circumstances after suffering injuries, and are apparently no longer able to work. When will the Government get their finger out and do something about it?

Mr. Walker: The Government are concerned and I am personally concerned about the accident rate in the North Sea and the tragic events that have occurred there. I am hopeful that before long we shall be able to announce to the House that we have extended to those workers engaged in the dangerous areas of the North Sea the protection and safeguards of the Health and Safety at Work Act.

Mr. Cryer: Does my hon. Friend accept that it is not only on the offshore installations that workers are facing difficulties over the Health and Safety at Work Act? Does he further accept that installation workers in the asbestos industry are facing particular difficulties? Recently a firm called CDN dismissed 13 workers for demanding overalls when using calcium silicate materials which were not marked to exclude asbestos as the code of practice requires them to be marked? Will my hon. Friend bring a maximum amount of pressure to ensure that employers

apply the Health and Safety at Work Act fairly and that people are not penalised for calling in the factory inspector?

Mr. Walker: I am very familiar with the problems to which my hon. Friend has referred. It goes beyond the firm of CDN. The problem has been a festering sore for years. It is interwoven with industrial relations problems. I do not want to say anything that will in any way diminish my concern about the danger associated with asbestos and its use in these installations. I have asked the Chief Executive of the Health and Safety Executive and the Chairman of the Health and Safety Commission to have another careful and critical look at exactly what is happening in that area.

Unemployed Persons

Mr. Michael Latham: asked the Secretary of State for Employment whether he will now make a further statement on the current level of unemployment.

Mr. Townsend: asked the Secretary of State for Employment if he will make a statement on the level of unemployment in the United Kingdom.

Mr. Norman Lamont: asked the Secretary of State for Employment whether he is satisfied with the current level of unemployment; and whether he will make a statement.

The Secretary of State for Employment (Mr. Michael Foot): The present level of unemployment is extremely high and in seasonally-adjusted terms is likely, I fear, to rise even higher over the next few months. The measures announced by the Chancellor last Thursday, like those previously announced in September and December of last year, can have some mitigating effect, but we cannot claim more than that for them. Meantime, we wish to make every preparation we can to expand the economy without recreating an intolerable rate of inflation.

Mr. Latham: Will the right hon. Gentleman confirm that a £50 million boost to the construction industry—a £10,000 million industry—will make no significant difference to the level of unemployment?

Mr. Foot: It will not have as great an effect as a much larger programme of reconstruction, but I think it will make a worthwhile contribution, along with the other measures that have been taken. I think that it can have some influence. I understand the nature of the full figures.

Mr. Joseph Dean: Is my right hon. Friend aware that the comments of the hon. Member for Melton (Mr. Latham) are quite unworthy when we take into account the deplorable record of the Conservative Government in the public building sector? The building programme in the public sector under the present Government shows a continuing improvement that should be welcomed by all hon. Members.

Mr. Foot: It is perfectly true that there has been some stepping up of the general building programme, but we want to carry it further, as I am sure my hon. Friend does, as soon as we possibly can.

Mr. Townsend: Does the latest evidence available to the Secretary of State confirm the suggestion that handicapped people, especially the blind, are being severely affected by the rising levels of unemployment? If so, what action does he plan to take?

Mr. Foot: By the various measures we have taken under the community industry arrangements, for example, and by the announcement that has been made about our plans in this respect, we have taken such steps as we can to help the disabled and the blind. We shall continue to do everything we can in that direction.

Mr. Kilroy-Silk: When does my right hon. Friend expect to be able to announce a dramatic decrease in unemployment?

Mr. Foot: I am as eager as my hon. Friend to reach that stage.

Mr. Henderson: In view of the fact that month after month the Secretary of State constantly says that he finds the unemployment figures unacceptable, what figure will have to be reached before he finds the situation so unacceptable that he feels it necessary to resign?

Mr. Foot: We want to do everything in our power to bring down the unemployment figure, partly with the aid of

the measures announced by my right hon. Friend the Chancellor of the Exchequer last week. I put the figures in proportion in my original answer, but what we need to bring down the figure is a general expansion of the economy. I wish to reach that point as speedily as possible.

Mr. Madden: Will my right hon. Friend say what is the average cost to the Exchequer in terms of the loss of revenue and other payments of an adult unemployed male?

Mr. Foot: It is a very heavy cost indeed. If my hon. Friend tables a Question on that point I shall be happy to give him the specific figure. It is undoubtedly the case that unemployment at any figure, and certainly at the present figure, imposes a heavy burden on the Exchequer and on the borrowing requirement of the nation. That factor must be taken into account in all the decisions that the Government must take.

Mr. Ridsdale: Has the right hon. Gentleman received the figures which I recently sent to him showing that a worker in my constituency is paid £44·50 per week when working and receives £42·50 when unemployed, which hardly makes it worth while for him to work?

Mr. Foot: I have not seen those specific figures, but I shall examine them.

Mr. Heffer: Will my right hon. Friend consider his answer about construction workers. Although I support the figure of £50 million, does he not agree that it is an insufficient sum to deal with the problems of the construction industry? Is he also aware that this week 33 per cent. of Merseyside ship repairing workers at the Weston Ship Repairers are likely to be made redundant? This is a continuing problem, and will he impress on his Cabinet colleagues the fact that despite the recent measures much more needs to be done to get to grips with it?

Mr. Foot: I do not dissent from what my hon. Friend said. I did not say in my original reply that I regarded the sum of £50 million as sufficient to deal with the problems; I said that it was a worthwhile contribution to help solve the problem. The measures taken by the Government over many years to assist building, and house building in general, have been of some assistance. However, I agree that,


especially in view of the figures mentioned by my hon. Friend in regard to Merseyside construction workers, more steps will have to be taken. The sooner we can get to that stage the better.

Mr. Prior: Will the right hon. Gentleman consider publishing the forecasts of unemployment over the next few months and perhaps even into next year, so that we can orientate ourselves more towards the future problems of unemployment and try to deal with the longer-term implications rather than with the serious situation which we all know exist at present?

Mr. Foot: I do not think any Government have published forecasts of that nature, but I believe that one of the matters to be considered in a fresh light is the medium-term problem. I do not deny that such a problem exists. Moreover, I understand from reports that the TUC General Council has been considering the proposal of a target to bring down the unemployment figure over a period. I think that can well provide a worthwhile approach to the problem and it is a matter that will be reconsidered by the Government.

Mr. David Mitchell: asked the Secretary of State for Employment what estimate he can make of the number of those out of work who were formerly employed by small firms, as defined by the Bolton Committee.

The Minister of State, Department of Employment (Mr. Albert Booth): No unemployment statistics are available from which an estimate can be made.

Mr. Mitchell: Does the Minister agree that small businesses have a considerable contribution to make to job creation? Does he also agree that with some easing of the burdens and the introduction of further incentives for small businesses a useful step forward would be taken, in terms job creation?

Mr. Booth: Of course small businesses have an important contribution to make to the unemployment problem and to job creation, but they are not excluded from proposals in regard to job creation. They will benefit from the recent reduction of the qualifying numbers in terms of temporary employment subsidy and they may also receive recruitment subsidies

for school leavers. My right hon. Friend the Secretary of State and I hope that with the aid of these measures small businesses will contribute towards the solution of the unemployment problem.

Mr. Hayhoe: Are there not indications that small businesses in the private sector are bearing more of the burdens of the present redundancies in unemployment than is the bloated public sector?

Mr. Booth: We shall know better the extent to which small businesses can benefit from assistance when the new qualification for temporary employment subsidy has been in existence for a period. That will give us a basis of measurement. In regard to existing figures, we find that about 60 per cent. of the applications for temporary employment subsidy come from small firms.

Mr. Anthony Grant: In view of the fact that the Bolton Report found that small firms were more labour-intensive than larger firms, would it not be more sensible to sweep away some of the more complicated provisions and regulations that so inhibit small firms from taking on additional staff?

Mr. Booth: In so far as my right hon. Friend and I are responsible for introducing measures to deal with the present abnormal levels of unemployment, we are doing so in a way that draws no distinction between large and small firms—as far as it is possible to do so.

Mr. Woodall: Is my right hon. Friend aware that South Kirkby Town Council in my constituency, which three years ago was a parish council—and one cannot get much smaller than that—has successfully launched a job creation programme with a grant of £45,000 from the Department? Is he aware that that council would like to expand its programme if it could be given more money? Will he comment on that situation?

Mr. Booth: I very much welcome the job creation project to which my hon. Friend refers. I assure him that any proposals put to the Manpower Services Committee for further job creation schemes will be carefully considered.

School Leavers

Mr. Dempsey: asked the Secretary of State for Employment if he will introduce


legislation with a view to providing compulsory minimum standards of training for schools leavers intending to enter industry; and if he will make a statement.

Mr. Harold Walker: We hope to be able to make a statement of policy on vocational preparation for young people within the next few weeks.

Mr. Dempsey: Is my hon. Friend aware that a leading employer is reported as saying that 300,000 young people enter industry every year with no semblance of training? In view of the restructuring of industry and the maximum advantages we hope to gain, has not the time arrived when young skill should be developed by introducing the principle of compulsory training?

Mr. Walker: My right hon. Friend the Secretary of State for Education and Science said in a debate on 24th November last that there were 300,000 people in the category to which my hon. Friend referred. He said that a forthcoming statement to the House would contain proposed measures to deal with the problem. I do not know whether my hon. Friend has seen the document prepared by the Training Services Agency entitled "Vocational Preparation for Young People". That will give an idea what the statement will contain. If my hon. Friend has not seen that document, I shall be happy to give him a copy.

Mr. Peter Morrison: asked the Secretary of State for Employment whether he will review the operation of the recruitment subsidy for school leavers, whereby such subsidies are not paid in respect of school leavers who have taken temporary work for more than six weeks.

The Under-Secretary of State for Employment (Mr. John Fraser): The operation of the recruitment subsidy for school leavers has been reviewed. As announced on 12th February 1976 by my right hon. Friend the Chancellor of the Exchequer, the life of the scheme has been extended to 30th September 1976, and as from 16th February 1976 Christmas school leavers have been included. No other changes in this scheme are contemplated at present.

Mr. Morrison: Does the Minister realise that because of the six-weeks' rule some young people are being discrimi-

nated against and that they are the very people who should be encouraged, because, in deciding to take on temporary employment until they gain full employment, they are casing the burden on the State?

Mr. Fraser: The hon. Gentleman wrote to me about a particular case. I appreciate the difficulty. However, if we were to amend the rule which says that the period of work must be no longer than six weeks or must be vacation work, we might find difficulty by having to subsidise job changes as well as employment. There is some hardship wherever one draws the boundary line. I have looked at the matter and I do not think that we can review the rules.

Mr. MacFarquhar: is my hon. Friend aware that the latest research suggests quite clearly that it is far more difficult for a trained man in his fifties to get a job even in a low unemployment area than it is for a young person—a school-leaver or a young worker—completely without training to get a job in a high unemployment area? Under these circumstances, will he consider with the Treasury possible incentives to firms willing to take on redundant workers in their fifties, after retraining?

Mr. Fraser: There is a difficulty at both ends of the age scale—for the younger worgers and for the older workers. I cannot commit myself in response to my hon. Friend's suggestion, but I shall give it consideration.

Job Creation

Sir A. Meyer: asked the Secretary of State for Employment how many jobs have been created or saved to date as a direct consequence of the Government's job creation programme; at what total cost and at what cost per job; how many redundancies have been notified; and what has been the reduction in the number of vacancies during the same period.

Mr. Harold Walker: I am informed by the Manpower Services Commission that, up to 13th February, 795 projects have been approved under its job creation programme, creating 9,906 jobs at a cost of £11·07 million. This is an average cost per job of £1,101 but the net cost is considerably less when savings in unemployment and supplementary


benefit, and statutory deductions, are taken into account.
Redundancies notified in Great Britain between 9th October 1975 and 31st January 1976 affected some 78,000 people.
The seasonally adjusted figure for the reduction in the number of vacancies at employment offices during the period 3rd October 1975 to 2nd January 1976 was 16,500.

Sir A. Meyer: Has it ever occurred to the Minister that if that money were used to cut taxes, especially for small businesses, many more jobs would be created or saved?

Mr. Walker: I should have thought that the whole House would welcome—as I understood the right hon. Member for Lowestoft (Mr. Prior) welcomed—first of all the establishment of the job creation scheme and, second, the considerable progress it is making and assistance it is giving in the areas which have perhaps suffered unemployment most severely. I regret that the hon. Gentleman has taken this line in respect of a project that I should have thought he would have welcomed, especially, in its application to his own area.

Mr. Bagier: Does the Minister agree that many hon. Members will believe that this is money well spent? Does he further agree that in areas of unemployment some of the jobs that have been created—for example youngsters helping in schools with ESN children, and the like—have given youngsters a first-class knowledge not only of working but a social conscience, which they would not have received without the scheme?

Mr. Walker: I wholly share my hon. Friend's view.

Mr. Brittan: I welcome the aims behind the job creation programme, but does the Minister agree that many more jobs could be provided under the programme if the people who obtained the jobs were not paid the full industrial wage? Does he agree that people would be fully prepared to take jobs at a lower wage?

Mr. Walker: I think the whole House would look askance at any idea of employing young people at anything other

than the rate for the job. We must be very careful about doing anything that may eventually smack of exploiting unemployed young people as cheap labour.

Mr. Skinner: Does my hon. Friend recall that in 1972, when unemployment reached just over 1 million, the then Secretary of State for the Environment sent out a circular to local authorities asking them to do pretty much what my hon. Friend is now doing? Does he not realise that, arising out of that circular, Clay Cross Council employed men for jobs that were necessary but have now been surcharged £30,000 by the district auditor for carrying out these necessary—

Mr. Speaker: Order.

Mr. Walker: I doubt whether my hon. Friend or the House would expect me to comment on the difficulties facing his colleagues at Clay Cross. When Operation Eyesore was introduced it was welcomed by the Labour Party in opposition. We thought it a sensible scheme. It is wrong, to make comparisons between Operation Eyesore and the measures that we are taking now, which go considerably beyond what was then proposed.

Trades Union Congress (General Secretary)

Mr. Arnold: asked the Secretary of State for Employment when he next plans to meet the General Secretary of the TUC.

Mr. Foot: The General Secretary of the TUC and I are frequently in touch with each other on a wide range of matters.

Mr. Arnold: When the Secretary of State next meets Mr. Murray will he place on the agenda for discussion the issue of what practical steps Mr. Murray now believes, judging from his most recent pronouncements, can be taken towards harnessing the EEC Regional Fund in combating the problem of structural unemployment in the British regions?

Mr. Foot: That is one of the few subjects on which I have not had discussions with the General Secretary. However, I am prepared to have discussions with him on the hon. Gentleman's suggestion.


We are in favour of using the Regional Fund to the maximum degree for the benefit of this country, even though we know that regional funds as operated by this country are of infinitely greater importance than any Regional Fund established by the EEC.

Mr. Rooker: When my right hon. Friend next meets the General Secretary of the TUC will he draw to his attention the fact that the current number of hours overtime worked in manufacturing industry is greater than all the hours that would be worked by the unemployed in that industry? That is a standing indictment of the British trade union movement.

Mr. Foot: I would not describe it quite in that way, but it is one possibility, which may be of assistance in dealing with the present unemployment problem. I am sure that trade unions will take that into account in their discussions.

Mr. Prior: In view of the need for increased investment, what consultations has the Secretary of State had with Mr. Murray concerning relaxations in price controls which will enable companies to have greater confidence that they can get a return on their money and to invest in further important projects?

Mr. Foot: There are practical discussions with the TUC on investment generally on an individual basis, and there are discussions at the NEDC. The TUC has put forward a number of proposals on these aspects of the matter. Some of the proposals were accepted in the package that was put forward by the Chancellor last week. I have no doubt that there will be further developments of that kind. Questions on price control and its future prospects are primarily matters for my right hon. Friend the Secretary of State for Prices and Consumer Protection. She has discussions with Mr. Murray on this subject, and that is the correct way for a report to be made to the House. That is one of the matters that figure in our discussions with him.

Miss Maynard: Does my right hon. Friend agree that the Government persuaded the TUC to accept the present wages policy on the understanding that they would keep down the level of unemployment? Does he not agree that the Government have failed to carry out

their share of the bargain? Does he agree that it is impossible to solve the problem of unemployment under capitalism? When will the Government attack this problem and other problems in our society by means of Socialist policies?

Mr. Foot: During all the discussions that we had with the TUC in establishing the present pay policy it emphasised very strongly its views about unemployment policies, and it continues to do so. It is well aware of the factors that led to the present appalling level of unemployment, and that led, in turn, to some discussions in recent weeks which culminated in the Chancellor's announcement last week. I have not the slightest doubt that discussions about the level of unemployment will figure very prominently in all the discussions we have with the TUC about a fresh agreement for the coming period. I believe that the two matters are intimately connected. I believe that the general crisis is one of Western capitalism, as I have said before, and we need long-term fundamental remedies for it, but we must have short-term remedies to deal with the immediate situation.

Mr. Nicholas Winterton: In his discussions with the General Secretary, what mention has been made of a reduction in company taxation which will lead to revived confidence in industry? Does the Minister accept that only by new investment can unemployment be reduced and employment increased?

Mr. Foot: That raises very general questions. Hon. Members are rightly anxious to hear the views of the TUC on these subjects, and I therefore suggest that they order now their copies of the TUC Economic Review, which will be published very shortly and will set out the TUC's approach to these questions.

Vacancies

Mr. Hall-Davis: asked the Secretary of State for Employment what information is available to his Department regarding the average interval that occurs between the creation of an employment vacancy by a retirement at normal retirement age and the filling of the vacancy by the employer.

Mr. Booth: I regret that no information about vacancies caused by retirements in the form requested by the hon. Gentleman is available to my Department or to the Manpower Services Commission.
An approximate estimate of the average duration of vacancies handled by the general employment services in the fourth quarter of 1975 is a little under three weeks. However, it is probable that the majority of vacancies are filled more quickly and that the average is affected by a smaller proportion of those with a relatively long duration.
I would not expect the interval that occurs in the filling of a vacancy caused by retirement to differ very much from that which occurs when vacancies are caused by other reasons.

Mr. Hall-Davis: Will the right hon. Gentleman and his colleagues consider, as possibly the only way in which they can prevent unemployment from rising further this year, encouraging, by a scheme of Government assistance, the voluntary retirement of men aged 63 and 64 in cases where the employer gives an undertaking that he will immediately fill the vacancy created?

Mr. Booth: I understand that the hon. Gentleman has written to my right hon. Friend on this matter, and I know that he has made a number of constructive suggestions on the effect of unemployment of changes in retirement arrangements. Retirement policy is a matter for my right hon. Friend the Secretary of State for Social Services, and the hon. Member might like to take up the proposals with her. There are difficulties in a voluntary scheme such as the hon. Gentleman proposes. We would have to gauge what the effect of it would be on unemployment and whether the additional cost to the Treasury would be the most effective way of spending the money, in comparison with some of the other measures open to us.

Merseyside

Mr. Kilroy-Silk: asked the Secretary of State for Employment what further specific measures he proposes to take to stimulate employment on Merseyside.

Mr. Foot: I would expect Merseyside to share in the benefits from the additional package of measures announced by

my right hon. Friend the Chancellor of the Exchequer on 12th February. I fully accept that the employment situation on Merseyside remains extremely serious, despite all the measures taken to help.

Mr. Kilroy-Silk: Does my right hon. Friend appreciate that in spite of the welcome measures taken by the Government, unemployment on Merseyside is at an intolerable level? Is he aware that the rate there is higher than in Scotland and Wales, and that this has a tremendously demoralising effect on the area. The situation is, of course, exacerbated by the present recession, but we have witnessed a steady decline in employment opportunities on Merseyside in the last decade. Will my right hon. Friend now undertake a major review of the employment prospects in the area, with a view to securing its long-term prosperity?

Mr. Foot: I fully accept and understand the frustrations and feelings of my hon. Friends from Merseyside about the situation there. They will accept that, in spite of the great difficulties, the Government have made efforts to help. Help under the Industry Act has safeguarded about 17,000 jobs on Merseyside. To assist with the longer-term situation, the Government upgraded Merseyside to special development area status in August 1974. The dispersal of about 3,500 Civil Service jobs to the region has been promoted. Under the mitigating measures the Government have introduced, 63 job creation projects have been approved to provide about 1,100 jobs, and eight applications for the temporary employment subsidy have been approved involving about 788 workers. A considerable proportion of school leavers have had their jobs safeguarded by the subsidy. I fully appreciate, of course, that the school leaver problem, along with the general unemployment problem, is more serious on Merseyside than in the rest of the country. We have also stepped up the community industry scheme on Merseyside. I accept that we need more than that, but it shows that the Government have been making an effort to assist, and we shall consider any other measures put to us.

Mr. Steen: Is the right hon. Gentleman aware that although 1,100 jobs have in theory been created under the job creation programme, only half that number have


actually got started? Instead of the officials of the scheme swanning around the country trying to advertise the programme as the panacea for all ills, they should be concentrating on mobilising people into jobs. Task Force was one organisation that was submitted for job creation approval on 19th November. It has still not had a reply.

Mr. Foot: I repudiate all the charges by the hon. Member against the job creation scheme. If he were a little more diligent in finding out how the scheme was working he would give a fairer report on it to the House. We are prepared to have everything out about what is happening under the scheme. If the hon. Member examines it more carefully he will see that it is doing a good job. No one has ever made the stupid suggestion—least of all those in charge of the scheme—that it is a panacea for all our ills. The hon. Gentleman should know that.

Mr. Loyden: I have a letter on my desk indicating that there is a further job loss of about 2,500 in Liverpool and that the position at Tate and Lyle and at Bear Brand is doubtful. Is my right hon. Friend aware that together these could result in Liverpool's losing more than 5,000 jobs? All the measures that have been taken have proved inadequate, and long-term measures are of no comfort to the unemployed. Will my right hon. Friend take immediate steps with his colleagues to look into the situation to see what can be salvaged from the job loss that is taking place?

Mr. Foot: I understand my hon. Friend's feeling on the matter. The Government consider every case where jobs are threatened to see whether we can assist either with the temporary employment subsidy or by direct means. This is the more successful way of sustaining industries in the long run. If my hon. Friends from Merseyside have any specific proposals that they wish us to look at, we shall certainly do so.

Mr. Hayhoe: Following the list of all the things the Government have done to improve employment on Merseyside, will the Secretary of State list all the measures that the Government have promulgated which have harmed employment prospects, not least of which is the Dock Work Regulation Bill?

Mr. Foot: The House gave a very short answer to the hon. Member for Brentford and Isleworth (Mr. Hayhoe) on that subject a few days ago. I am amazed that he dares to raise it again so soon. It is not true to say that we are responsible for creating difficulties in this matter. We are seeking to overcome them.

Mr. Speaker: Order. If we had had shorter questions and answers, I could have called more hon. Members.

Nationalised Industries

Mr. Tim Renton: asked the Secretary of State for Employment what plans he has to deal with inbuilt overmanning in the nationalised industries.

Mr. Booth: Manning levels and the effective use of manpower are the responsibility of the management of the industries and enterprises concerned, and improvements are best sought by management and unions acting together. My Department, however, does have a rôle in seeking to ensure that where redundancies are inevitable regard will be paid to the interests of the workers concerned and effective arrangements made for their speedy redeployment.

Mr. Renton: Does the Minister accept that his answer is all waffle? Will he and the Secretary of State call a conference of all the chairmen of nationalised industries to report within the next six months on how they propose to deal with the problem of long-term overmanning, which is, alas, endemic in nationalised industries?

Mr. Booth: I totally reject the implication of that question, which is clearly that these problems are somehow peculiar to nationalised industries. Over the last 10 years, the coal industry has reduced its labour force by 245,000 and increased output by 25 per cent. per man, the steel industry has reduced its labour force by 29,000 and the gas industry by 17,000—while increasing the amount of gas sold by 270 per cent. Over the same period, the electricity supply industry has reduced its manpower requirement by 58,000 and British Rail's manpower requirement has been cut by 168,000. We accept that it is important that the most efficient possible use should be made of manpower in the nationalised industries, but


we do not accept the proposition that only nationalised industries are overmanned.

Mr. Ronald Atkins: Is my right hon. Friend aware that demanning in the public sector is infinitely greater than in the private sector? Is he aware that his hon. Friends would prefer capacity to be increased in the public sector to maintain existing employment of the workers who frequently have to be dismissed when the State takes over inefficient private industries to keep them going?

Mr. Booth: Of course, we would prefer nationalised industries to increase output and services without any reduction in manpower.

Mr. Marten: The right hon. Gentleman did not answer the question put by my hon. Friend the Member for Mid-Sussex (Mr. Renton) about calling a conference. If he does call such a conference, will he raise with the leaders of nationalised industries the proposition that wage settlements in those industries should all be arrived at on one day of the year, in order to prevent leapfrogging? Does he agree that when wage increases are granted for productivity, they should be paid only when the productivity has been achieved, and not before?

Mr. Booth: In the majority of cases, the possibility of making payments on the basis of productivity in the nationalised industries is curtailed, if not completely prohibited, by the existing pay policy. We have no reason to suppose that we would want to use different tests between the public and private sector in this matter. There are matters which are discussed with the chairmen of all nationalised industries, but I do not think that the idea of a common date for pay increases would take first place on the agenda.

Mr. George Rodgers: Does my right hon. Friend agree that this problem is largely caused because nationalised industries are labour-intensive? Does he further agree that if we took into public ownership banking and investment industries, this problem might not arise?

Mr. Booth: My hon. Friend will see from the figures that I have given that nationalised industries are now less

labour-intensive. Where labour-intensive industries are brought within the public sector, the Government and this House have more control over the overall employment effects on industries and services in this country.

Oral Answers to Questions — UNITED STATES OF AMERICA

Mr. Wrigglesworth: asked the Prime Minister, if he will pay an official visit to the United States of America.

The Prime Minister (Mr. Harold Wilson): I refer my hon. Friend to the reply that I gave to the hon. Member for Christchurch and Lymington (Mr. Adley) on 5th February, Sir.

Mr. Wrigglesworth: In view of the Right-Wing attacks being made on the policy of detente in the presidential campaign in the United States and by the Right-Wing in this country—though no general election campaign is taking place here—will my right hon. Friend bring his influence to bear on all parties concerned to ensure that the spirit of Helsinki is upheld?

The Prime Minister: The one thing on which we can all agree is that none of us wants to make remarks or get involved in the presidential and primary campaigns in the United States. On the question of parts of the Helsinki Agreement going beyond Europe—which is all it covers—I refer my hon. Friend to the speech of my right hon. Friend the Foreign Secretary on Friday last week.

Mrs. Thatcher: Will the Prime Minister discuss with our American allies a question that is deeply worrying many people, namely, whether Cuban troops and Soviet weapons are to be used in southern Africa beyond Angola to further Communism in Southern Africa, and also what steps should be taken now, in the British interest, to prevent that from happening?

The Prime Minister: Again, I refer the right hon. Lady to the public speech of the Foreign Secretary on these matters last Friday. The whole House will share the deep anxieties that exist about any extension of violence, for example, to Rhodesia. This stems from the fact that over 10 or 11 years there has been no response whatsoever, despite the votes of


this House, from Mr. Ian Smith to suggestions for getting a reasonable settlement there. This is vitally urgent, and the Conservative Party has not always helped.

Mrs. Thatcher: Is the answer to my question "Yes"? Will the Prime Minister take an initiative of the kind that I have suggested?

The Prime Minister: The answer is that the Foreign Secretary has already done so, both in Europe and more widely. Again, I refer the right hon. Lady to his speech on Friday.

Mr. McNamara: My right hon. Friend is right to draw the attention of the House to the speech of the Foreign Secretary, but may I draw his attention to the action of the President of the United States in not accepting the decision of the Senate to extend United States territorial sea limits to 200 miles? When my right hon. Friend meets President Ford, will he congratulate him on not taking premature action on this matter, and on waiting, instead, for the Law of the Sea Conference, but also impress upon him that when the extensions are made we shall have a 100-mile exclusive fishing zone for British fishermen?

The Prime Minister: My hon. Friend is right. Until the Law of the Sea Conference, no one should take unilateral action on this matter. I do not think I should comment on the last part of my hon. Friend's question, dealing with what might happen after the Conference.

Mr. Churchill: In view of the decisive victory achieved by Soviet/Cuban intervention in Angola, will the Prime Minister raise as a matter of urgency with the President of the United States the clear challenge to freedom, democracy and peace posed by the militarism and expansionism of the Soviet Union? Will he further make it clear that Great Britain would support the United States in any measure to cut off capital——

Mr. Speaker: Order.

Mr. Churchill: —grain and technology to the Soviet Union until they are prepared to move towards a genuine detenté?

Mr. Speaker: Order. When I rise, the hon. Member for Stretford (Mr. Churchill), should resume his seat. That applies to all hon. Members.

The Prime Minister: The hon. Gentleman will be aware that, whatever the views of the United States Government, the United States Congress voted strongly against involvement in Angola. I do not know whether he or the Leader of the Opposition are saying that when the United States took that action we should ourselves have put in troops.

Oral Answers to Questions — SELF-EMPLOYED PERSONS

Mr. Paul Dean: asked the Prime Minister when he next plans to meet representatives of the self-employed and the small independent businesses.

The Prime Minister: I have at present no plans to do so, Sir.

Mr. Dean: Does the Prime Minister recall that the House passed a Resolution on 30th January calling for action to alleviate the burdens which threaten the existence of the self-employed and the small business? Will the right hon. Gentleman consider a meeting with representatives of the self-employed and small businesses to show that he takes seriously the Resolutions of the House, to give him an opportunity to appreciate the importance of this section of the community to the nation and to hear first hand from it?

The Prime Minister: It was a good Resolution and the House accepted it, with our support. The hon. Gentleman will be glad to know that my hon. Friend the Minister of State, Department of Industry, met representatives of the CBI Small Firms Council earlier today, and that representatives of the self-employed have been meeting Treasury and Department of Health and Social Security Ministers on taxation and social security matters. My hon. Friend the Financial Secretary is looking at a package deal put forward for the simplification of the VAT scheme. There are other comments that I could make if there were time, but I recognise that Mr. Speaker would not wish me to make them.

Mr. Michael McGuire: Is my right hon. Friend aware that the small businessmen and the self-employed in Skelmersdale New Town have suffered as a


result of the tremendous loss of jobs there and that the prosperity of those people cannot be divorced from the general prosperity of the community? What steps are the Government taking to remedy the terrifying unemployment position in Skelmersdale New Town?

The Prime Minister: I recognise the facts put forward by my hon. Friend, but his supplementary question goes much wider than the original Question.

Mr. Thorpe: Does the right hon. Gentleman recollect that on 4th November his hon. Friend the Minister of State, Department of Health and Social Security, said that the Government were examining the possibility of earnings-related national insurance contributions and benefits, to which the self-employed attach great importance? How is that examination proceeding? When it is concluded, may we assume that the self-employed will be told at once?

The Prime Minister: My right hon. Friend is pursuing inquiries into a possible system of earnings-related national insurance contributions and benefits for the self-employed, and she will present her conclusions to the House as soon as possible.

Oral Answers to Questions — ECONOMIC AFFAIRS (PRIME MINISTER'S SPEECH)

Mr. Tim Renton: asked the Prime Minister whether he will place in the Library a copy of his public speech on the economy in London to the Overseas Bankers' Club on 2nd February.

The Prime Minister: I did so, Sir, on 4th February.

Mr. Renton: Does the Prime Minister recall that, carried away perhaps by the spirit of the occasion, he assured those present at that banquet that we are winning through but that there can be no let-up? Will he tell the House how he sees us winning through, in the context of unemployment at a record high and the sterling exchange rate at a record low?

The Prime Minister: The House has recently debated unemployment, and my right hon. Friend the Secretary of State for Employment and others have been answering Questions about it today. I

was not carried away. I was responding there, and at Birmingham, to a very clear statement of increased confidence by business, and I gave the House last week the text of what business has in effect said. The hon. Gentleman might draw attention—and so might the whole Opposition—to the vast improvement in our balance of payments, which affects exchange rates and the rest. The deficit in the balance of payments, including oil, is now very much less than it was under the Conservatives in their last year before the oil crisis hit Britain.

Mr. Ashton: Did the Overseas Bankers Club confirm that general interest rates are falling and that one way of stimulating the construction industry and preventing unemployment would be to tell the building societies to cut their interest rate to 10 per cent?

The Prime Minister: The building societies have certainly had a record inflow and they have also been lending considerably. On housing generally, my hon. Friend will be aware that in 1974 there were 30 per cent. more public sector starts and 20 per cent. more completions than in 1973. For 1975, public sector starts—the highest since 1969—were 18 per cent. further up on 1974, and completions were 24 per cent. up. The figures for 1973 were the lowest since the end of the war, in certain aspects of housing.

Mr. Maurice Macmillan: As we appear to be doing so well, according to the Prime Minister, will he consider consulting our European partners and our American allies on the possibility of increasing aid to those countries, such as Zaire and Zambia, which appear to be most threatened by recent events in Angola, for the purpose of helping them in their difficulties and ensuring our future supplies of the raw materials that they provide?

The Prime Minister: Yes, Sir. As I have said on many occasions, I agree about the increased urgency because of recent events.

Oral Answers to Questions — TUC AND CBI

Mr. Whitehead: asked the Prime Minister when he next expects to meet the General Council of the TUC.

The Prime Minister: I am frequently in touch with representatives of both the TUC and the CBI at NEDC and on other occasions. I shall be taking the chair at the next meeting of NEDC on 3rd March, Sir.

Mr. Whitehead: On that occasion will my right hon. Friend convey to the TUC the fact that the recent encouraging retail price index figures merit a tribute to the working people at all levels whose sacrifice has helped to bring about this abatement in inflation? Where does my right hon. Friend place the priority in the next stage of the incomes policy as between measures to stimulate investment and employment, particularly in productive industry, increases in the social services, and increases in net disposable income through the taxation system?

The Prime Minister: My hon. Friend is absolutely right; there has been a remarkable response to the policy approved by the House, upon which the Opposition did not vote—apart from voting on an amendment against it. It is impossible to separate the two issues of inflation and unemployment, whether nationally or internationally. I refer my hon. Friend to what the Chancellor of the Exchequer said not only in his statement last week but also in the speech that he made last Friday.

Mr. Wyn Roberts: At his meeting with the TUC will the Prime Minister explain to the TUC and the country how the Chancellor of the Exchequer can promise reductions in taxation in return for a low rate of wage increases before such an agreement has been reached with the trade unions?

The Prime Minister: I shall have no difficulty. In these matters the members of the TUC are much more literate than are hon. Gentlemen on the Opposition Benches.

Mr. Molloy: Does my right hon. Friend agree that because the Government have avoided deliberate confrontation with the TUC there has been remarkable co-operation in the fight against inflation, and that efforts are required from the CBI to back up the price restriction policy so that ordinary people can see that they are being given a fair deal for any sacrifices they make?

The Prime Minister: I have had full co-operation. What my hon. Friend said at the beating of his supplementary question is right. It is highly relevant to small businesses, on which I was questioned earlier. In the confrontation and the three-day working week imposed by the Conservative Government no one suffered more than small businesses

Oral Answers to Questions — LUXEMBOURG

Mr. Hurd: asked the Prime Minister when he next proposes to visit Luxembourg.

The Prime Minister: I shall be meeting Mr. Thorn, the Prime Minister of Luxembourg, when he visits London next week and I expect to see him again in Luxembourg at the next meeting of the European Council on 1st and 2nd April, Sir.

Mr. Hurd: Will the Prime Minister confirm that one of the most important subjects at that meeting in Luxembourg will be the proposals for a more efficient concerted European foreign policy? In view of the tense situation in Africa, will the Prime Minister, in advance of that meeting in Luxembourg and despite his complacent reply to my right hon. Friend the Leader of the Opposition, take an initiative now to bring about concerted Community policy on Southern Africa which might deter the Soviet Union and her friends from further adventures in that continent?

The Prime Minister: I entirely agree with the way in which the hon. Gentleman formulated that supplementary question. We are trying to achieve a common policy on these matters; indeed, a meeting is taking place today. It has been made a little difficult because we do not have full support for our insistence that the Nine should adopt a common policy in this respect.

Mr. Dalyell: Does the Prime Minister support the view that before anything is done in Brussels and facilities are eventually made available there, Luxembourg, and not Strasbourg should be the sole seat of the European Parliament? Does he know that it costs £1 million a year simply to move documents, apart from the energy expended by senior


officials in travelling between the three points?

The Prime Minister: One answer might be to have fewer documents, provided always that the documents I submitted for consideration after my talks with the German Federal Chancellor about the adoption of a system akin to that of our Public Accounts Committee—which would strengthen the work of the Assembly—are not lost in the process.

Sir D. Walker-Smith: Will the Prime Minister take the occasion, amongst other no doubt more important matters, of seeking courteously to instruct the spokesmen for the Council of Ministers in the European Parliament, by exhortation if not example, in the art of answering parliamentary questions shortly and succinctly?

The Prime Minister: That is, first, because I get such strange questions from some Opposition Members and, secondly, because I always like to inform the House as fully as possible.

Several Hon. Members: rose——

Mr. Speaker: Order. I am obliged to the House that we reached Question No. 5 to the Prime Minister today.

DOMESTIC VIOLENCE BILL (PROCEEDINGS)

Mr. Rees-Davies: On a point of order, Mr. Speaker. I should like to refer to the point of order raised yesterday by the hon. Member for Barking (Miss Richardson). The hon. Lady gave me no notice that she was to make a reference to me. I understand it is the normal convention and courtesy of the House that when such matters are raised the hon. Member concerned should be informed and be able to reply.

Mr. John Mendelson: Why were you not here?

Mr. Speaker: Order. Interruptions from a sedentary position spoil everything in this place. I wish hon. Members would contain themselves.

Mr. Rees-Davies: The hon. Lady made a great mistake. She said that to have the Bill
talked out by mistake makes an absolute mockery of this House.
Those facts are entirely wrong. There was no question of a mistake, as the hon. Lady must have known. As the debate drew on, having lasted not a very long time, I drew her attention to the fact that there had been a Select Committee and that hon. Members were willing to give the Bill a Second Reading provided that it went to the Select Committee.
The Leader of the House made the point——

Mr. Speaker: Order. I must ask the hon. and learned Gentleman to come to the point of order he wishes to raise with me.

Mr. Rees-Davies: The point of order is that, having corrected the record, the Lord President of the Council yesterday said:
there is a tremendous sense of grievance amongst many hon. Members at what occurred on Friday. If it will help, I will examine the matter and discuss it with you and my hon. Friends to see whether we can find a way out of the difficulty".—[Official Report, 16th February 1976; Vol. 905, c. 952–955.]
The right hon. Gentleman did not say that he would discuss the matter with me or any of my colleagues or, indeed, anybody on this side of the House.
The point is that the right hon. Gentleman set up the Select Committee to report last year. It reported in July. Hon. Gentlemen opposite have asked for the Select Committee to be reappointed, but the Government have refused that request. Having refused to reappoint the Select Committee, they put up a Front Bench speaker to speak until one minute to 4 o'clock so that Back Benchers were unable to speak to the Bill.

Mr. Speaker: Order. It is quite clear that is not a point of order for me. It is a matter for the Government.

Mr. Rees-Davies: Further to that point of order——

Mr. Speaker: Order. I have ruled that it is not a point of order.

BILL PRESENTED

RACE RELATIONS

Mr. Secretary Jenkins, supported by Mr. Secretary Foot, Mr. Secretary Ross, Mr. Secretary Mulley, Mr. Alexander Lyon, and Mr. Attorney General, presented a Bill to make fresh provision with respect to discrimination on racial grounds and relations between people of different racial groups; and to make in the Sex Discrimination Act 1975 amendments for bringing provisions in that Act relating to its administration and enforcement into conformity with the corresponding provisions in this Act: and the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 68.]

ROAD TRAFFIC (AMENDMENT)

3.34 p.m.

Mr. Doug Hoyle: I beg to move,
That leave be given to bring in a Bill to amend the Road Traffic Act 1972.

Mr. Russell Kerr: On a point of order, Mr. Speaker. Some of us would like to hear my hon. Friend make his contribution. May we have greater quietness, please?

Mr. Speaker: Order. The hon. Gentleman is quite right. When hon. Members are leaving the Chamber in large numbers, they should do so quietly.

Mr. Hoyle: The object of this measure is to make it compulsory for motorists to display insurance certificates on the windscreens of their cars.
At the moment, unless a person is pulled up by the police for a traffic offence or because he is involved in an accident, there is no means of knowing whether he has a current certificate of insurance covering his road vehicle. Unless that happens, and apart from the occasion when he has to apply for a road fund licence, when he has to produce a current certificate of insurance—current at the date in question—a person can drive for 12 months without any certificate at all.
The only figures I have been able to obtain relate to 1974. In that year

146,277 people were prosecuted for driving without insurance. I believe that that is only the tip of the iceberg.
If my Bill were passed, it would mean that anyone could tell by looking at a vehicle whether the owner had a certificate of insurance. It would also make it far easier for the police to detect offenders who continually violate the law in this respect.
In 1974 there were just over 60,000 proscutions of people for driving without road fund licences compared with 146,000 for driving without insurance cover. There is a lesson to be learnt there. If we could detect these people, they would be forced to take out insurance cover. That is very important. We have detector vans going round discovering those who have television sets but no licences for them. That is important, but it would be even more important if we were able to discover those who did not have insurance certificates covering their motor vehicles.
People both inside and outside this House, can be involved in road accidents at any time. Any one of us could lose his life or be severely injured in a road accident, and his wife and dependants would have no recourse against the person driving the car if he had no current insurance certificate. The only recourse would be through the Motor Insurers Bureau, which has been set up to provide funds to protect any person or his dependants if he is involved in an accident with someone who is not covered by insurance.
We are paying in two ways. First, part of the fee paid for an insurance certificate goes towards a central insurance bureau to protect people against these buccaneers who are driving about and neglecting the essential duty of taking out insurance cover. Secondly, there is the tremendous loss to the insurance companies. Taking only the figure of 146,000 prosecutions to which I have referred, this means a loss of between £5 million and £6 million to the insurance companies. I believe that the loss is far greater even than that. I do not suggest that insurance premiums would come down if we could close in on these people, but at least we might be able to make the premiums more stable if we could bring these offenders back into the fold.
The people to whom I refer are the hit-and-run drivers and other offenders who are difficult to trace. If we could identify these people, the insurance companies could load the premiums against them and make the cost of insurance so prohibitive that they might be forced off the road. That would make the roads safer for all of us.
This is a simple measure. I hope that the House will accept it. If it does, we shall not only put these cowboys off the roads, but make the roads safer for all people.

Question put and agreed to.

Bill ordered to be brought in by Mr. Doug Hoyle, Mr. Mike Noble, Mr. Maurice Orbach, Mr. Jim Callaghan, Mr. Dan Jones, Mr. Arnold Shaw, Mr. Terry Walker, Mr. Roger Stott, Mr. R. E. Bean, Mr. Frank R. White, Mrs. Ann Taylor and Mr. Ron Thomas.

ROAD TRAFFIC (AMENDMENT) BILL

Mr. Doug Hoyle accordingly presented a Bill to amend the Road Traffic Act 1972: and the same was read the First time; and ordered to be read a Second time upon Friday 27th February and to be printed. [Bill 67.]

MOTOR INDUSTRY DEBATE (VOTE)

Mr. Speaker: Before I call the Leader of the House to move his motion, I wish to make a brief statement to the House.
At the conclusion of the Division during the Supply Day on Wednesday, the right hon. Gentleman the Parliamentary Secretary to the Treasury raised a point of order which Hansard reports as concluding with the words:
… I should like it to be recorded that the Government do not accept the decision which has been recorded"—[Official Report, 11th February 1976; Vol. 905, c. 525.]
At the time, I made the comment that what the Government accepted was not my responsibility.
After serious reflection, I am satisfied that my reply needs further explanation. In so far as the right hon. Gentleman's words could be taken to mean that the Government intended to disregard a vote of the House and to proceed as if it had

never been taken, those would not be proper expressions of opinion either for a Minister to make or for a Speaker to overlook without deprecation.
I must make it plain that proper regard should be held at all times for resolutions and orders of the House and, so far as lies within the power of the Chair, it is the duty of the Speaker to uphold them. Those proceedings on last Wednesday's Division were in order; the result is a matter of record and will remain on record in the Journals.
It is of course open to the House to modify the effect of a decision after it has been taken or, indeed, in effect to nullify the decision, provided that the same Question is not again proposed in identical terms, but until such a course is taken, the decision stands.

The Parliamentary Secretary to the Treasury (Mr. Robert Mellish): Following what you have just said, Mr. Speaker, may I make it abundantly clear to the House that I willingly withdraw the remarks that I made last week and apologise to you and to the House for having made them? The House will know something of the heat of the moment at the time, when a second Division had been called when about 140 or 150 Members who had voted in the First Division were absent. I made my remarks in the context of the absence of those hon. Members.
However, I have been a Member of this House for 30 years and I claim to be as good a House of Commons man as most. I would therefore say to the House that I recognise and put it on record that any decisions of this House must be binding on the Government of the day, and I so state. I therefore apologise and ask to be allowed to withdraw the statement.

Mr. John Peyton: I should like briefly to acknowledge with gratitude, Mr. Speaker, what you have just said. If I may say so respectfully, your words were very well chosen and very welcome. I should like to thank you on behalf of the whole House. I should also like to say to the Parliamentary Secretary to the Treasury that we recognise that the heat of the moment is of fairly frequent occurrence in this place. We very much appreciate what he has just said.

Hon. Members: Hear, hear.

3.44 p.m.

The Lord President of the Council and Leader of the House of Commons (Mr. Edward Short): I beg to move,
That this House, notwithstanding the opinion expressed on 11th February in the Motion relating to the salary of the Secretary of State for Industry, affirms that the provisions of the relevant Statutes shall continue to apply.
I should like to make it clear that in the Government's view we are today debating a procedural oddity, which is perhaps unprecedented, in that a miscount in the Lobby almost certainly converted a Government majority into a paper defeat. That is why we cannot agree that any question of confidence is involved in the second vote last Wednesday. As to my right hon. Friend the Secretary of State for Industry, I have no doubt that a majority of hon. Members have every confidence in him, but that is not the issue in this debate.
What happened last week was a quirk of the kind which occurs in the House from time to time. This could, of course, be proved by instructing the authorities of the House to produce a list of those who participated in the lapsed Division. However, we have not done that and we are not proposing to do it in the motion. We have preferred to follow precedent and to deal with the only point involved, which is my right hon. Friend's salary.
We are doing this despite the fact that, strictly, no action is necessary because the Opposition motion last Wednesday was simply an expression of opinion which could not be given effect without further action. Nevertheless, as my right hon. Friend the Parliamentary Secretary to the Treasury has just said, we accept the technical validity of the second vote and, therefore, think it right to give the House this opportunity to change its expressed opinion, which was reached in such unusual circumstances.
The fact of the Government's ability to attract the support of a majority of the House surely cannot be in doubt. For instance, on Tuesday of last week, against all the predictions of the Press and the Opposition, and against the combined maximum efforts of the opposition parties, the Government had a majority of quite unexpected size in all the Divisions, although of course at considerable cost to sick Members, to our European delegations and to ministerial duties.
However, in politics, I believe, one should never get too elated or too deflated about anything. In the event, Wednesday saw an apparent turnabout, but I am afraid that it was a turnabout purely by accident and not by the efforts of the Opposition.
When it became clear to my right hon. Friend the Government Chief Whip that there had been a miscount on the first vote, he took the proper and honourable course. He brought the matter to your notice, Mr. Speaker, and the Tellers from both sides confirmed the mishap. It would of course be fascinating to know precisely what was the outcome of the first vote, but we are forgoing that satisfaction and instead are handling the matter in the traditional way.

Mr. Victor Goodhew: Am I not right in saying that it is not open to the right hon. Gentleman to reopen the question of whose names were recorded in that first Division, so that he is not forgoing any right but merely facing the facts, as he has to face them? He is doing nothing generous in this and I am sure that he would not wish wrongly to claim credit for it. He is surely not entitled to reopen the question of whose names were recorded in a lapsed Division.

Mr. Short: I am not claiming any credit or claiming to be generous. I am saying only that we are forgoing putting in this motion an instruction to the Clerks to publish the names in the first Division. If we did so, that would show that the Government had won that Division quite handsomely.
I find it interesting to consider the comments last Wednesday of the right hon. Member for Yeovil (Mr. Peyton).

Mr. Patrick Cormack: On a point of order. Are the comments which the Leader of the House has just made in order, Mr. Speaker, in view of what you said earlier about the validity of the first Division and the second one?

Mr. Speaker: But the House is its own master. If the House decided by resolution on a certain course, it would not be in my power to overrule the House.

Mr. Short: I think that I am in order, as is any hon. Member, in speculating on the result of that Division had it been


announced. I am simply speculating on what the Division lists would have shown if they had been published.
I was talking about the right hon. Member for Yeovil. He questioned whether it was right to take another vote. He said to you, Mr. Speaker:
The point I wish to put to you is whether this is the moment at which the Question should be put again.
You, Mr. Speaker said that it was the right moment and he went on to say:
I wonder whether this is correct"—[Official Report, 11th February 1976; Vol. 905, c. 520.]
My right hon. Friend supported the inference in what the right hon. Gentleman had said—that the new vote should be put on a different occasion—but, understandably, you, Mr. Speaker, following precedent, ruled that the Question should be put immediately. The second vote revealed, as my right hon. Friend had predicted, an "untrue picture". Many hon. Members from both sides had left the House, including myself. The fact that fewer Government than Opposition supporters were in the Lobby on the second occasion was not, I am sure, because my right hon. and hon. Friends are more nimble-footed in getting away from this place than are hon. Members opposite. The fact is that Private Business was to follow and, whereas the Government were following the normal procedure in Private Business of not intervening, the Opposition were, quite exceptionally, whipped.
The fluke result which this produced moved my right hon. Friend to give notice of the present proceedings. It was a matter not of being a bad loser but of preferring—with justification—the prospects of being a good winner. To repeat, we could not in the circumstances treat the matter as one of confidence in either the Government or my right hon. Friend the Secretary of State. However, nor, quite seriously, could we think of ignoring the expressed view of this House, even in the circumstances which I have described. We have, therefore, simply given the House an opportunity to reconsider the issue. I am sure that hon. Members will wish to use this chance to record their views on the issue.

Mr. Sydney Bidwell: On a point of order, Mr. Speaker. Will you clear the matter up for the House?

Will you say what we are restricted to talk about during this debate? The Leader of the House said in his statement that we were virtually confined to talking about the salary of my right hon. Friend the Secretary of State for Industry. At the moment I do not even know what his salary is. Can we resume the debate on the motor industry which gave rise to the decision of the House at that time?

Mr. Speaker: I am much obliged to the hon. Gentleman. It is always dangerous to ask the Speaker how far one can go because, by the nature of things, he likes to limit remarks. However, it is possible, within the terms of this motion, to discuss the duties of the Secretary of State. Hon. Members should bear in mind how long the debate is expected to continue.

3.53 p.m.

Mr. John Peyton: A certain love of understatement causes me to describe the speech of the Leader of the House as rather disappointing. He said that he might have called for the figures, and, as he spoke as if he knew what the figures were, we can only be surprised that he did not do so. However, the right hon. Gentleman did not make that clear.
I should like to make it clear myself that on this side of the House there is no ill will whatever towards the right hon. Gentleman——

Mr. Cormack: Which one?

Mr. Peyton: The right hon. Gentleman the Secretary of State for Industry.
We shall be a great deal less disturbed if at the end of the day he gets his full money than we are by his policies and by what he does. Indeed, we have frequently noted—and this is to be said in his favour—that there are times when his own enthusiasm seems to be absent from the speeches that he makes in support of those policies.
We are also greatly concerned today about the Government's general attitude to Parliament. Last Wednesday was just one occurrence which fanned those anxieties. There can be no doubt in anyone's mind that the motion last week was intensely critical of an important aspect of Government policy. It is worth mentioning that the last time such a motion was carried was in 1895, and then the Government, well-advised and very


properly prompted, with good motives, resigned.
My hon. Friend the Member for Bridgwater (Mr. King)—reported at column 461 of Hansard for that date—made it absolutely clear that it was the Opposition's intention to censure both the Minister and the Government on grounds of incompetence, delay and failure to practise what they preached. There was never any dispute—nor is there now—as to the weight of criticism behind the motion. Both sides had three-line Whips. There is also no dispute as to what happened. A Government Teller miscounted, quite possibly to his own party's disadvantage. I wish to be absolutely fair. My hon. Friend the Member for High Peak (Mr. Le Marchant) very properly called attention to the fact and as a result the Tellers declared themselves unable to report reliable figures.
I suppose that by this time the right hon. Gentleman the Leader of the House had disappeared. We are grateful to him for his acknowledgment. It must be difficult for him to take part in this debate not having had the advantage of being present to witness what occurred on that occasion. Nevertheless, in the right hon. Gentleman's absence a brief argument took place under cover of that ghastly hat.

Mr. George Cunningham: Hear, hear. Get rid of the damn thing.

Mr. Peyton: I agree with the hon. Gentleman. It is a grotesque hat and I very much hope that when the right hon. Gentleman the Leader of the House has had time to set up the Procedure Committee it will make arrangements for the final disposal of that hat.
You then said, Mr. Speaker, that you had no alternative but to put the Question again and to do so at once. This ruling, if I may respectfully say so, was very disturbing to the usual channels, in whose mind there dawned an apprehension and suspicion that some hon. Members, zealous as always in the pursuit of their public duties, might have prematurely left the precincts. The Division which followed proved that that was so. The Government lost by five votes, but with neither side commanding quite the full support which efficient and cruel

whipping could have led them to have expected.

Mr. Richard Wainwright: Will the right hon. Gentleman give way?

Mr. Peyton: No, I should be obliged if the hon. Gentleman would intervene a little later.
Neither your calling of the Division, Mr. Speaker, nor the result which you duly declared provoked any demonstration of wrath or anger from the "terraces opposite". It was only from the "Director's Box", if I may so call it, that there came a fairly sharp reaction.
I have had to limit severely what I intended to say in view of what the right hon. Gentleman the Chief Whip said just now. However, the Chief Whip did rise, with a great deal of gnashing of teeth, and asked—as you have reminded the House, Mr. Speaker—that it should be recorded
that the Government do not accept the decision which has been recorded."—[Official Report, 11th February 1976; Vol. 905. c. 525.]
The right hon. Gentleman the Chief Whip has very rightly and properly withdrawn that remark, and I accept that withdrawal. However, I think it is important that we should take note that that decision, whatever miscalculations or mishaps may have laid behind it, was a decision taken in accordance with the rules and properly and duly declared by you, Mr. Speaker.
It behoves us in this place to take note of the fact that rules are quite important. They are the sinews of our British constitution, which at one time placed effective limitations upon the power of the majority. It is one of the problems of our time that the limitations and restrictions upon the majority are no longer effective.
The Government today invite the House to rescind a decision. I have reminded the House that the last time that sort of thing happened, in 1895, the Government very properly resigned. However, it would make a great nonsense of our proceedings, which are already receiving their full share of public criticism, if such an invitation were to be issued whenever things went just a bit wrong, even when the errors crept into the machinery of the Whips' Office. It would be tantamount to the Government saying, with


only a gossamer-thin disguise, "The House of Commons must decide things our way".
If that is not the intention of Ministers, I must say this to them: they have clumsily adopted, without prior thought or subsequent explanation, an attitude of something near to contempt for the rules, which I have described as the very sinews of our constitution.
The appearance of this motion on the Order Paper means in fact that you, Mr. Speaker, are satisfied that it is in order. However, before we pass it, if pass it we do, the House should surely pause to ask the question, "Are we not turning our backs rather abruptly on the rule to which "Erskine May" refers, on page 377?" That rule is that
no question shall be offered which is substantially the same as one on which judgment has been expressed during the current session
It is true that the "Good Book", as you term it, Mr. Speaker—if I may respectfully say so, I should like to describe it in very different ways—goes on to say that this rule is very strictly interpreted so as not to preclude rescission. However, the Question today—we have to notice this—is virtually the same, save for a negative, as that on Wednesday: should the right hon. Gentleman have his money? We were saying and are saying that, for reasons wholly without malice towards himself, we think that he should not have it, or should have to make do with less.
To go on from that point, we reach a stage—I am sorry to have to say this, Mr. Speaker, because it seems to run contrary to your endorsement of this great work—at which the "Good Book" immerses itself in detail. As I have observed in my limited incursions into the work, it has a preference for detailover clarity. On page 377, the same page, these words are used:
The power of rescission has only been exercised in the case of a resolution resulting from a substantive motion, and even in such a case sparingly. It cannot be exercised merely to override a vote of the House, such as a negative vote.
It then gives a reminder of the requirement that there should be sufficient variation in the subsequent motion. Perhaps I may quote the words of the book:
Sufficient variation would have to be made not only from the form but also from the

substance of the rejected question to constitute the second question a new question.
Perhaps I may again respectfully quote, for the last time, from this book. There is a more refreshing and rather clearer summing up on page 379, where it is said:
With regard to the whole matter it may be stated generally that the reason why motions for open rescission are so rare and why the rules of procedure carefully guard against the indirect rescission of votes, is that both Houses instinctively realise, as a precedent referred to above shows"—
and here are the words that really count—
that parliamentary government requires the majority to abide by a decision regularly come to, however unexpected, and that it is unfair to resort to methods, whether direct or indirect, to reverse such a decision.
I believe that those words, and particularly that last quotation, deserve the very careful attention and consideration of us all.
I do not want to make a long speech today, but I should like to sum up by saying that the debate today at least touches upon things of very great importance, in particular the question whether there are any remaining effective checks upon the power of the Executive and the—for the time being—majority in this House. I choose my words with care. The present Government are not particularly respectful of views other than their own—so much so that their beliefs in liberty seem from time to time to have been wholly evap0orated by their arrogant determination to get their own way.
It is for those reasons that my right hon. and hon. Friends will vote against the motion this evening.

Mr. Edward Short: Nonsense.

Mr. Peyton: To have the right hon. Gentleman the Leader of the House just comment from a sedentary position to say that that is nonsense——

Mr. Edward Short: Rubbish.

Mr. Peyton: If the right hon. Gentleman likes to use some other term, I shall gladly listen to it, but he goes on saying "Rubbish", "Nonsense", and the rest, and in so doing from a sedentary position he once again shows how justified my words today have been.

4.8 p.m.

Mr. Bob Cryer: I am most grateful for the opportunity to make a few comments in this important debate. It is important because, among other things, it shows up some of the glaring inadequacies of our Parliament. It seems to me extraordinary that our decisions should depend on whether hon. Members stay on for 10 minutes or so to see whether the count has taken place correctly, or whether they have gone to an important meeting or, perhaps, for some sort of relaxation. This is an indication that the House really ought to have a look at some electronic method of voting which could be recorded by the individual Member and done much more rapidly. In addition to the confusion that going through the Lobbies causes on these, happily, rare occasions, it also wastes a great deal of time.

Mr. Goodhew: Is the hon. Gentleman saying that the buttons for electronic voting should be in places such as the Russian Embassy, for the convenience of those who dash out, as happened the other evening.

Mr. Cryer: I know of the hon. Member's total obsession with the red menace and how, like his companions on the Opposition Benches, he longs to spend public money in huge swathes on anything connected with armaments, but when it comes to spending public money on the kind of things that matter, like housing, the National Health Service and schools, he takes a different view. Then he starts bringing up the ridiculous smear tactics in which, I am sorry to say, his companions consistently indulge.
I am suggesting that the House could well have a look at some kind of device for improving the speed at which we take our votes. It is rather ridiculous that we should have a system in which we have occasionally to bring people from hospitals and sick beds into the precincts to register their vote by entering the Lobby.
I am very pleased that my right hon. Friend the Leader of the House is present, because it is due to the Labour Government that we are to have a look at our procedures and establish a Committee so that we can, perhaps, improve the whole system, so that an error of this kind will

not occur again. If we have three or four votes taking roughly 20 minutes each, that involves an hour or more. Frankly, we are paid to do something rather different from simply marching through the Lobbies.
The motion is also concerned with my right hon. Friend the Secretary of State for Industry. I know that he would not miss the £1,000 and would probably relish the gesture of giving up that £1,000 to demonstrate that the Labour Government are not merely seeking to enhance salaries for themselves and are prepared to recognise that they represent the working class of the country who will never see the same very large salaries as Cabinet Ministers and other members of the Government receive.
The difficulty is that the Opposition, on the other hand, are seeking merely to play politics in this situation and are using this opportunity to criticise my right hon. Friend for his valiant efforts in assisting in the rescue of Chrysler, on which he has spent the bulk of his time. It seems to me that while the Opposition pour out their criticism, all that Opposition Members have been doing with their voices and votes is to speak and vote against retaining the existing levels of employment.
Only an hour or so ago we had a Conservative Front Bench speaker and others of those hon. Gentlemen opposite getting up and condemning us, asking what the Government were going to do about decreasing the present level of unemployment. What did they do when it came to rescuing the 40,000 or 50,000 jobs in Chrysler? They opposed it, just as they opposed the rescue of Alfred Herbert, because they see any act of the Labour Government as a kind of creeping Socialism which must therefore be opposed on political dogma, the dogma of the market place, allowing people to go to the wall, although hon. Gentlemen opposite are careful not to place themselves in the position of adding voluntarily to the dole queue.
If some Opposition Members gave up their triple and quadruple jobs on boards of directors, which is an area in which they should be concerned with overmanning, or the directorships with which they are busily lining their pockets, and if they had a look at their own circumstances, they might very well feel a little


more humble when they turn and criticise ordinary working people on such matters as overmanning.
There is nothing whatsoever positive to add to this debate. The Opposition are simply carping critics. They had no solution whatever to the Chrysler problem except to let it go to the wall and let the 25,000 workers in Chrysler line up in the dole queue, because that is the kind of competition which they consider dynamic, the kind of competition that will lead to change and revitalise the economy. That is absolute rubbish, because the diminution in demand would have repercussive effects throughout the whole of our economy. Some parts are made for Chrysler in my constituency, though only a small amount. But the ripples from the closing of Chrysler would spread throughout the length and breadth of the country, and there is hardly an hon. Member here who would not feel the effects.
Already today Opposition Members have been moaning about self-employed small business men. Some small businesses are involved in the Chrysler situation, producing parts for that firm. Therefore, we are not talking only about a basic 25,000 people who are employed in Chrysler.

Mr. Nicholas Ridley: The hon. Gentleman started his speech by inveighing against defence expenditure. Is he aware that his own Government have cut 68,000 jobs out of defence industry in the Armed Services? Why is it so laudable to save civilian jobs where motor cars are not required for civilian or military purposes whereas it is quite wrong to employ people in defence in the public sector, and unemployment produced by cuts in defence is apparently good? Can the hon. Gentleman explain this paradox?

Mr. Cryer: I shall be delighted to do so. First of all, the Government's figures for the reduction in manpower in the Services have a suspicious approximation to annual wastage. It may well be that the reduction in the Services is not all that much greater than wastage. It is not only a question of saving civil jobs and getting rid of defence jobs. Many of us on these Benches have always been advocating that there has to be some kind of planned change-over, that it cannot simply be left

to the dole queues to effect a change-over. Of course, the Labour Party actually believes in a planned economy. It does not believe in the effects of the market-place, and it is legitimate for Labour to argue that the Government should be producing a plan for the change-over from swords to ploughshares.
Of course there will be difficulties, but let me remind the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) that in 1945 we had exactly the same difficulty but we managed to effect the change-over from a war-based to a civilian-based economy in a remarkably short space of time. The reason was that the Government had a very large measure of control over the economy, and it was not left to private enterprise entrepreneurs to do what they wanted to people and throw some of them on the scrap heap.

Mr. James Lamond: No doubt my hon. Friend will also recall that workers in the armaments industry take a great interest in this matter. For example, recently we had a visit in one of the Committee Rooms of this building from the chairman of the Lucas combined shop stewards' committee, a Mr. Michael Cooley; and I am very proud to be able to tell my hon. Friend that he is an ex-president of my union. He had with him documents which outlined a great many practical alternatives to arms production which the workers had themselves worked out, designed and priced, and made available to management throughout the industry. When we have co-operation of that kind—[Interruption.]

Mr. Deputy Speaker (Mr. Oscar Murton): Order. The hon. Gentleman is moving from an intervention into a speech.

Mr. Lamond: If I may conclude, Mr. Deputy Speaker——

Mr. Deputy Speaker: Very briefly.

Mr. Lamond: Does not that indicate that there is great scope for changing workers from arms production to other production?

Mr. Cryer: I am grateful to my hon. Friend for what he has said. I was not present at that meeting. It sounds as if it were a most important one. Members of the Opposition, giggling as usual in schoolgirl manner, do not realise that


there is within the trade union and Labour movement a huge, untapped reservoir of talent. Here my hon. Friend is pointing out that workers whose jobs are to be affected are prepared to look at the whole situation, because these workers are, by and large, descendants of the people who formed the Labour Party in the first place and sent it into office, so that we could establish the right kind of priorities, low on defence and high on social service projects to which we are all so much committed.
That brings me to my next point, which is very important. If criticism can be leveled at my right hon. Friend the Secretary of State for Industry, it is that within the framework of consultation there is insufficient means for the Minister and the rank-and-file trade unionists involved to have face-to-face contact so that ideas can be exchanged and developments made.
Far from being the wreckers that the newspapers and the disgraceful cartoon which appeared in the Daily Mail made out, the workers of Chrysler produced a very comprehensive plan which they brought to this House and handed to my right hon. Friend the Patronage Secretary and which eventually reached my right hon. Friend the Secretary of State for Industry. That document recognised a factor which the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) also pointed out in his abject intervention. It recognised that we cannot depend on saturation of car production for ever and that there will come a time when car production will be diminished.
In their document, the car workers themselves recognised the need to develop products which would be of benefit especially to the Third World. They went into great detail. They considered, for example, the facilities at the Ryton car paint shop, the fact that there is a huge demand for vehicles of the Land Rover type and a long waiting list, and that we can export virtually as many as we can make. They felt that it would be a good idea to transfer some of the production from British Leyland to the Chrysler line at Ryton. However, they pointed out that their paint shop would not paint aluminium because it was based on an electrostatic technique. That was the kind of detail they went into in their docu-

ment. They gathered information from the various plants in the country and they came to this House because they wanted to show that they were thinking not purely in negative terms but positively.
If there is any criticism, it is that there was not enough face-to-face contact between members of the Government and the people in the factories, although there were contacts between my right hon. Friend the Secretary of State and national union officials. That is the importance of this situation. I hope that Chrysler will ensure that it uses the talent which is endemic in that report and that the people who compiled the report will not simply be cast to one side.
I move to another aspect of vague criticism. I feel that, before the Government make judgments about a strike situation, they should investigate both sides. They can give the impression that they are bolstering up what the capitalist Press, which is opposed to them, is trying to fob off—the suggestion that the strikers at Linwood, for example, were merely antagonistic for good purpose.
There was a very complicated situation. It was a difficult transfer. It was difficult for the trade union movement to accept the number of redundancies involved. Therefore, it behoves the Government to tread warily in such an instance. As my hon. Friend the Member for Renfrew-shire, West (Mr. Buchan) pointed out, the convener at Linwood, Mr. John Carty, gained a great deal of respect from those hon. Members who met him in one of our Committee Rooms.
It looks sometimes as though we have dual standards. We say to people where public money is going, "You are wrong to withdraw your labour." At the same time, however, we have passed the Trade Union and Labour Relations (Amendment) Bill, which is designed to enable people to maintain their function as a trade union and to withdraw their labour. If the Government are doing this but saying that on no account must strike action be taken, the two seem incompatible. That is a degree of criticism which I advance.
On the other hand, having looked at the Chrysler deal, no matter how complicated it is, the fact is that the Government have saved a number of jobs. They


have also saved an important export contract in terms of 70,000 or 80,000 vehicles a year exported to Iran. That represents an important asset to our balance of payments, and we would have lost it if the deal had fallen through. The Government have also ensured that the Chrysler Alpine will be assembled at Ryton—[Interruption.].

Mr. J. W. Rooker: On a point of order, Mr. Deputy Speaker. Your hearing may be better than mine, but I have the greatest difficulty in hearing my hon. Friend the Member for Keighley (Mr. Cryer) because of the chitchat going on between Opposition Members.

Mr. Deputy Speaker: The Chair was not aware that there was any conversation going on. If it was, I deprecate it.

Mr. Cryer: I am afraid that on the Opposition Benches there are some Right-wing extremists who are attempting to break up the solemn nature of Parliament. It occurs from time to time. It is very much to be deprecated when moderate people like me are attempting to put forward from the Government Benches an earnest discussion about a matter which, after all, involves some 50,000 jobs. I know that the Opposition are not too interested, because they have their salaries here and, in addition, they may well have the odd directorship or parliamentary advisership. They do not need to worry too much about 50,000 jobs and about the man on £40 a week who has to go home to tell his family that he is redundant. The Opposition have never been bothered before. Why should they start now?
We have here a classic situation which also contains some warnings for the Government. One of the difficulties is that this was a multinational company and that the Iran contract was with the parent company and not with Chrysler United Kingdom Ltd. Therefore, the parent company could wield a certain amount of leverage against the Government.
We have to be prepared to fight these multinational companies and be willing at some stage to say "No. We are not prepared to accept this kind of black-mail." I have in mind an international company with a distribution network throughout Europe. It can say to the

Government "Unless you are prepared to make a contribution of £X million to this factory, it will close, and if you keep it going yourselves you will have to contribute £X million to avail yourselves of the dealerships." It took Datsun five years to achieve a 1 per cent. penetration of the United Kingdom market. Any British car manufacturing firm which was established by the State taking over the tatters of private enterprise remnants might well face the same problem in attempting to penetrate the European market.
Then, again, the Government will have to do some sort of investigating into the preparation that is needed in a situation where a multinational company says "It is true that we are manufacturing these cars here, but mostly they are assembled from parts brought in from West Germany." I understand that the Vauxhall Chevette has body panels manufactured in West Germany. A multinational company could argue "By all means take over the factory, establish a production line and make these cars under licence. But unless you are prepared to give us a substantial contribution of £X million, the cost of producing the additional body panels in our West German or French factory will be too high." This is one of the enormous problems facing any Labour Government in what is basically a capitalist economy, and our Government have to make sure that we are not held to ransom.
Having said that, one matter that remains to be explained is the function of the two directors on the board of Chrysler. I know that my right hon. Friend will be able to explain their rôle in promoting industrial democracy because he is enthusiastic about it. One difficulty about public ownership in the past has been that the man on the broom-handle has not felt the effect of any change.
It is true that Chrysler remains a privately-owned company in a peculiar amalgam with the State. We do not have to wait for the promotion of industrial democracy in the private sector because we are to have two directors on the Board of Chrysler. Chrysler cannot object to them and cannot throw them off. We have two powerful figures. I hope that they will not disappear into limbo but that we shall have regular reports from


them. I hope that these people will be the means by which industrial democracy will be brought to Chrysler.
The talented people in Chrysler should be utilised. I am sorry that no other way could be found to enable workers to control Chrysler, to enable those who produced the report I have mentioned to run the business. That would have been the finest solution of all. Our support for the Government was given on the basis that the action would save 50,000 jobs. In such a situation the Government can rest on our determined support. But we are not solely in the business of propping up capitalism, although on some occasions that may be necessary to preserve jobs. We are in Government to change society.
Many people go to the polls in the hope and expectation that this change will take place. If, ultimately, people find that the same management is doing the same job, over-ordering the same parts, failing to carry out orders, maintaining poor industrial relations and not consulting work-people as in the past, they will become disillusioned. People will say that the Labour Government have not fundamentally changed things. It is true that jobs will have been saved, but the system of society which allows a small group of people to exploit the rest will not have been altered. I hope that my right hon. Friend the Secretary of State will be able to produce some comprehensive explanation of how industrial democracy will be introduced into Chrysler. I can tell him that his £1,000 will not depend on his explanation, but it would be nice to have it all the same.
Comparisons have been made between the output of British car workers—Chrysler has been mentioned—and the output of workers in West Germany and France. We need to increase productivity. That is not in dispute. The workers want to do so. Through increased productivity we increase the wealth that maintains what is generally termed a social wage. But the workpeople want to know that that wealth will be shared fairly and that the system of exploitation by which a few get the goodies and the majority make the sacrifies will not be perpetuated.
At the same time, it has to be pointed out that the workpeople will not increase productivity if it means sacrificing their health and even their lives. The figures

for deaths in industry are appalling. In 1973, for example, 896 people died as a result of industrial injury in British manufacturing industry. In France the figure was 2,246, while in Italy it was 3,527. In West Germany—that economic paradise, the place where there is apparently much higher productivity—a country with roughly the same sort of manufacturing population as our, there were 4,011 deaths.
It may be worth pointing out to Tory Members, and to some of my hon. Friends, that although they may talk about days lost through strikes we lose many more times that number of days through industrial injury. I never notice any concentration by the Press on loss of life and limb and the consequent loss of working days. If, however, some people come out on strike in an awkward industrial situation, it makes headlines.
I want an assurance from my right hon. Friend that any measure to increase productivity will not be at the expense of the good health of working people. I confidently expect that assurance since it was this Government who introduced the Health and Safety at Work etc. Act—although it is true that the legislation was drafted by the previous Conservative Government. Therein lie a few faults. One of the criticisms of the Act is that it is not strong enough. I hope that, as experience is gained, the Government will take over my Private Member's Bill aimed at toughening it up. It would certainly benefit a great deal from that action.
I want to conclude—[Interruption.] I am overwhelmed by the enthusiasm shown for my speech. It is generally reflected outside the House on many occasions. I conclude by saying that the vast majority of people outside wanted a straight-forward public ownership deal for Chrysler. Certainly the workpeople, the people at Chrysler, wanted that solution. All their elected representatives were here asking the Government for that solution. The difficulty lies in the complexity of the multinational organisations we face. Although this deal is complicated and not the most ideal situation for us, it has nevertheless saved a number of jobs.
I hope that Chrysler will move to success. I hope that the design team at Chrysler, which has produced so many


excellent models and which designed the Alpine—it was voted the car of the year—will prosper. I trust that the level of investment will increase, because in the past it has been appallingly low. Further, I hope that the two directors will keep a sharp eye open for any transfer of machinery outside the United Kingdom. This has been going on. There is no doubt that Chrysler International has been shifting resources, machinery and design talent from the United Kingdom. I want to see Chrysler become a success.[Interruption.] The difficulty is that we operate against a background of interjections from hon. Members in a sedentary position.

Mr. Alan Clark: I was simply adding to the hon. Gentleman's argument by asking whether he did not think that was there a danger of Chrysler International not only shifting its own resources but shifting its grant money from this country.

Mr. Cryer: That was characteristically churlish of the hon. Member. He has only just come into the Chamber. He will not have heard that the Government have placed two directors on the board of Chrysler. When I was outlining their functions, or what I thought their functions would be, I was happy to see my right hon. Friend nod in strong agreement when I suggested that they should make regular reports.
The directors will be in a strong position within Chrysler. Chrysler cannot dismiss them. I dare say the hon. Member did not know that. Chrysler cannot object to them. They are overriding directors from the British Government with a duty to report to the Government and make sure that any money which the British taxpayer puts into Chrysler is used in this country and is not shifted abroad.
The point I was making before I was interrupted was that we operate against a sad background of churlishness on the part of the Opposition. I wish that they would play a more constructive rôle. All that the Opposition do is to plead at Question Time for more jobs. Their mentors and the daily Press are saying that we have a satisfactory level of employment, but when we put forward a plan to rescue Chrysler and save 50,000 jobs we get the strong impression that the Opposition would be happy if the

operation failed. I regret that. It is a negative, destructive attitude but that is the Opposition's rôle. They are bound by political dogma. They desperately want to see the economics of the market place operating. Their Front Bench team has recently been strengthened by those who believe in the economics of the market place. Their Front Bench was very weak to begin with.

Mr. Edward Short: It is relative.

Mr. Cryer: My right hon. Friend the Leader of the House suggests that strength is a relative term, but it is a weak strength.
We want Chrysler and everyone else to succeed, but success is judged not only in cash terms but by translating our ideas on industrial democracy into reality. If he needs inspiration, my right hon. Friend should read a document written in 1909 by A. J. Cook on the democratisation of the coal industry—"The Miners—the Next Step". Perhaps by taking out that document and discussing with the trade union movement the ideas involved in that situation we will be led down the road of industrial democracy. If we are to have industrial democracy, the workers must have a share in the direction and decision-making of their company and control over their own destinies within industry. That is the important element of democracy. Perhaps the cash position will follow because workers' talent and ability will for once be brought to bear on industry.
For many years the Opposition have talked in elitist terms about how only they and their own class have the ability to manage and lead. But our supporters are anxiously waiting for the opportunity to reform industry. I hope that Chrysler will be a success. It deserves to be.

4.43 p.m.

Mr. John Stokes: Having listened to the exuberance and verbosity of the hon. Member for Keighley (Mr. Cryer), I promise the House that my words will be shorter and my speech plainer.
I represent a constituency which has in it thousands of car workers. They are people whom I greatly admire, like and respect. They are sensible, down-to-earth and non-doctrinaire in their approach to these matters. If the hon.


Gentleman found himself by some mischance in my constituency I doubt that anyone would remain to hear the end of his speech. His words bore no resemblance to what the ordinary working man, the ordinary car worker, thinks about things today.
The hon. Gentleman started by preferring automation in the handling of our voting to the time-honoured method, but if the matter were put to a free vote today it would have only one or two supporters here and would receive no support outside. The least that can be expected of an hon. Member, if he cannot listen to all the debate, is that he should be present to vote in person.
We are debating the salary of the Secretary of State for Industry. I have always believed that, in general, Ministers are substantially underpaid for their responsibilities and in comparison with their civil servants and many others with fewer responsibilities. I believe, however, that the House was right to suggest that there should be a reduction in the Minister's salary. After all, he was the man who was supposed to resign, so we are reliably informed, if massive aid was given to Chrysler. He did not resign—but nobody resigns these days.
Before discussing Chrysler I shall consider British Leyland. I have some knowledge of the Corporation's management and of one of its large plants. I personally know many scores of British Leyland workers. I know their wives and families through meeting them in their homes and in clubs and pubs. They are not rebellious. I am struck by their decency and moderation. The few subversive workers are always pointed out to me by the work force, not by the management. The workers can identify the bad apples. Most of the workers are decent, honest, hardworking and patriotic Englishmen. I am reminded of Napoleon's maxim that there are no bad troops, only bad officers. Has there been any improvement in the officers and NCOs—the managers and foremen in the large British Leyland plants? If there has, I have not heard about it, and neither have many workers on the shop floor.
I have always believed that the Leyland group was too big and that it would have survived better if it had been kept in its constituent parts with the Leyland

bus and truck division producing vehicles which enjoy a reputation throughout the world, with those great car makers Daimler, Rover and Triumph producing their vehicles and with Morris producing the Mini. The Cowley works needs a careful examination if it is to survive as a viable unit. I hope that the Minister does not think that bigness always makes for best. In my constituency, labour relations on the whole are good, partly because units are small and the workpeople know the boss well.
I have always found the Chrysler saga quite extraordinary. The old military maxim of reinforcing success has been turned upside down. It seems that we are now reinforcing failure. It is incredible that we are pouring millions of pounds of taxpayers' money into the making of motor cars that apparently no one wants to buy. Not even the workers who make them want to buy them. It is an astonishing state of affairs.
If it is unsound to make unwanted motor cars, surely the plant can be adapted either to make products which customers will buy or to make, for example, tanks and the other armaments which we shall undoubtedly need as the months go by, bearing in mind the increasing Soviet threat that lies not least in Southern Africa. I believe that the work force would willingly adapt itself to that important task. I do not know why Labour Members laugh. I do not know why they should despise working men who make defensive equipment for this country. Their attitude seems to be beyond understanding.
The handout to Chrysler of not less than £162½ million is astonishing, having taken place when many small businesses are going bankrupt. They are often going bankrupt for want, for example, of £10,000. The handout took place when many thousands of self-employed are trying to keep their heads above water without any help from the Government. It seems that there has to be a colossal failure before the Government come to one's rescue. That seems to be the economics of Bedlam.
It is also curious that a Labour Government should support an American multinational company. Could it be that they were attempting to buy votes in Scotland? If so, I am afraid that the money will be


wasted as the Labour Party in Scotland is bound to be decimated by the Scottish National Party.
I do not wish to be unduly harsh towards the Secretary of State for Industry as he has listened to part of my speech. I believe him to be a distinct improvement on his predecessor. I believe that at bottom he is sensible and intelligent, and quite a realist. However, either he has been got at by his colleagues or he has been swayed, as has happened to many a politician, by an overwhelming ambition to become top of the pops in his own party.
In the end, I have always believed that the best rule for public or private life is to stick to one's principles. I feel, with regret, that the right hon. Gentleman's salary should be reduced, and I hope that the House will endorse its earlier decision.

4.54 p.m.

Mr. Eric Heller: I am sorry that the right hon. Member for Yeovil (Mr. Peyton) has left the Chamber because I shall address some remarks to some of the points that he made in very brief speech.
As so often happens, Conservative Members have tried to suggest that the Labour Party and the Labour Government are not respectful of the views of others. The implication to be drawn is that the Labour Party and the Government representing that party are opposed to democratic concepts. It is suggested that we wish to introduce some form of bureaucratic society in which the democratic principles are destroyed. We hear these suggestions increasingly from the Leader of the Opposition and from the right hon. Member for Leeds, North-East (Sir K. Joseph). They have been implied this afternoon.
Those who make such suggestions know that they are travesties of the truth. The Labour Party is more dedicated to the principles of democracy than almost any other political party in this country. Conservative Members have tried to equate the principles of private enterprise with democracy. They suggest that we cannot have democracy if we get rid of the private enterprise system. I note that the hon. Member for Henley (Mr. Heseltine) nods his head. I say quite bluntly that that suggestion is a lie. The system that now exists in Chile is based upon the concepts of Milton Friedman of

the Chicago School of Economists. It is a military dictatorship where there is no freedom of thought, where there is a controlled Press and where there are no political parties able to participate in political dialogue.

Mr. Deputy Speaker: Some sentences back the hon. Gentleman used the word "lie". That is an unparliamentary expression. I hope that the hon. Gentleman was not referring to a right hon. or hon. Member.

Mr. Heffer: I did not refer to any statement made by any individual. I said it was a lie that the removal of private enterprise—

Mr. Deputy Speaker: So be it.

Mr Heffer: —would mean the end of democracy. I did not mean to cast any reflection on any individual in the House. I shall briefly pursue that point.
Private enterprise exists in Spain. Is there democracy and freedom in Spain? The private enterprise system existed in Portugal. Was there total democratic freedom in Portugal? Is there such freedom in Portugal now? The private enterprise system existed throughout the Greek colonels' régime. Was there democracy and freedom during that régime? We have only to consider the realities to know that the argument being put forward by Conservative Members is totally false. It is wrong to equate Labour Members with the destruction of democratic principles.
The argument that is used by some Conservative Members is a revival of the argument that was used by the great Winston Churchill at the end of the Second World War when he tried to equate the Labour Party with the establishment of Nazism. What I fear in this country is not the destruction of democracy from any forces on the Left but its destruction by forces on the Right, which in the name of defending democracy will destroy it.

Mr. Peter Hordern: Does the hon. Gentleman accept that the forces on the Right to which he refers have not made themselves very apparent so far? In addressing himself to a serious argument, which I know he is, will he comment on the view of the Secretary of State for the Home Department that a proportion of the national


income taken by the State which exceeds 60 per cent. is not good for a plural society and is ultimately a threat to democracy?

Mr. Heffer: I read the statement by the Home Secretary referred to in the article written by Lord Chalfont and also mentioned by David Wood in The Times yesterday. It is an interesting point, and I personally missed that statement. If the Home Secretary said it, I say bluntly that the Home Secretary was wrong. I do not mind saying that openly without any hesitation.
The right hon. Member for Yeovil based his argument on "Erskine May". He said that this House should accept the vote no matter how unexpected it was. We all agree with that, but we also appreciate the peculiar circumstances of events the other evening. After the vote hon. Members rushed out to attend to other duties—just as the right hon. Member for Yeovil rushed out to look after his duties, having delivered himself of his speech today. Surely the right hon. Gentleman's duty, after he had spoken today, was to stay to listen to the rest of us. No doubt the right hon. Gentleman has other duties, and I do not condemn him for that, but it is easy enough to make condemnatory statements of that kind.
I repeat that the circumstances the other evening were peculiar. I happened to be here on that occasion. However, I could have been absent while attending a function. Therefore, it was not an unexpected result of the kind dealt with in "Erskine May".
I turn to the serious matters which should be discussed on the subject of the salary of the Secretary of State for Industry and the functions of the Department of Industry. My view is that it might have been a good thing had the Government tabled a motion laying down that the salaries of all Cabinet Ministers should be reduced. I should support such a motion enthusiastically, but I do not think the Secretary of State for Industry should be single out for any reduction in salary.
I am extremely critical about certain aspects of Government policy, and particularly of the policies pursued by the

Department of Industry. However, I do not blame the Secretary of State for Industry for those departures from our policies—policies on which the Labour Party fought the election. Having been in Government, I know that no individual Minister can accept any responsibility for all Government policies, and that applies to departmental heads as well as to others. There are such things as Cabinet committees and Cabinet meetings where matters are worked out. There is also such a thing as collective responsibility. Therefore, whatever decisions are taken they are, in the last analysis, taken because they are Government decisions accepted by the Cabinet. That is a very important point to bear in mind.
I have to say, sadly, that over past months there has been a change in the attitudes, if not in the direction, of the Department of Industry. It did not begin with my right hon. Friend the present Secretary of State for Industry. It began before he ever came into the job. We as a Government have retreated from our manifesto commitments. We argued that the National Enterprise Board must be used as a positive instrument for the extension of public ownership into profit-making sectors of industry. I ask my right hon. Friend the Secretary of State for Industry to say which sectors of industry are earmarked, not for analysis but for the extension of public ownership on the lines laid down in the Labour Party programme on which we fought two elections. How much money will be made available to carry out that programme on which we were elected?
The retreat began when pressure was applied because some Conservatives suggested that we intended to nationalise 100 leading companies. If I have a criticism at all, it is that we did not specifically state the areas to which we wished to extend public ownership. Because we were not specific, that led to an unnecessary lack of confidence and fear on the part of some industrialists who believed the nonsense that was put out by the hon. Member for Henley—namely, that every leading company would be taken over immediately.
Personally, I would not be averse to extending public ownership much faster than was intended, but it was not intended along the lines suggested by the hon. Gentleman. That led to a difficulty.


Because of pressure from the CBI, the City and bankers, my right hon. and hon. Friends in the Government retreated from our manifesto commitments to the present situation involving the Chequers statement.
It has been said by the Conservative Party that the Government have now abandoned the Chequers statement. That is true. It has been abandoned in the sense that the Government moved in to rescue Chrysler from complete collapse by putting up public money. But one aspect of the Chequers statement was maintained—namely that, although public money was put into Chrysler, there was no public responsibility, no take-over, no public control. That was in line with the Chequers statement and it was happily accepted and welcomed by the City and Conservative Members.
My criticism of the Department of Industry is that we have retreated from the basic ideas on which we were elected. Of course the NEB will continue, of course there will be planning agreements, but the NEB and the planning agreements will not have the teeth originally intended for them by the Labour Party before the election, and indeed before the White Paper. The arguments that took place were lost in the period up to the White Paper, not entirely after my right hon. Friend the Secretary of State for Industry came into his present office. But I am afraid that he has also undoubtedly been pressured by other Members of the Government to retreat slightly further. That is what we should be concerned about.

Mr. Michael Heseltine: The hon. Member for Liverpool, Walton (Mr. Heffer) has a unique contribution to make on this subject. If the arguments were lost in the period running up to the publication of the White Paper, why did he go on serving in the Government who published that White Paper?

Mr. Heffer: Because, as the hon. Gentleman knows, sooner or later one has to decide when one has had enough. If the time had not come on the issue of the Common Market, it might have come when the Industry Bill was going through the House. The hon. Gentleman served on the Committee dealing with

the Industry Bill and he knows that there was nobody more unhappy than I on that Committee in having to argue against my hon. Friends who were tabling amendments with which I basically agreed.
One is either in the Government or one is out of the Government. Opposition Members who have been in the Government must know that. I am certain that when the hon. Member for Henley was a member of the Government he did not accept everything that went on in the name of that Government. However, one cannot resign every five minutes. Anyway, I do not necessarily believe that resignation is the right way to do things. I think that one should fight for one's ideas at an appropriate moment and make a stand on a basic issue. But that is enough about my personal position.
I conclude my modest contribution by drawing attention to an immediate problem in the solution of which the Department can offer considerable assistance. I am referring to the Weston Shiprepairers on Merseyside where 33 per cent. of the workforce is threatened with redundancy this weekend and where five of the 10 docks are likely to be closed, adding a few more hundred to the nearly 90,000 already unemployed on Merseyside. We cannot afford to have this continual reduction of work forces on Merseyside. I appeal to the Department to meet the representatives of the confederation and the employers. I believe that my hon. Friend the Minister of State is to go to Liverpool or Birkenhead on Saturday. I hope that when he is there he will take the opportunity to meet these people to see what can be done and what assistance the Government can possibly give to stave off or help to alleviate the problem.
This is a serious debate which should concentrate on the real problems of the Department and the issues which we face. We should try to work out a sensible solution rather than talk about reducing my hon. Friend's salary by £1,000.

5.12 p.m.

Mr. Hal Miller: Following the example of the hon. Member for Liverpool, Walton (Mr. Heffer), I shall try to concentrate on the serious aspects of the Department's work. Last week we discussed the reduction of


the Minister's salary largely in the context of the motor industry. On the motion to restore his salary, I should like to set that motor industry in the larger context of industry in the West Midlands. I do so because the situation there is serious and the present Government have done nothing to remedy it, despite a very valuable contribution by the hon. Member for Birmingham, Northfield (Mr. Carter) who raised the matter at the end of May last year in an Adjournment debate to which the Minister of State replied.
I shall recap the brief discussion which took place on that occasion. The hon. Member for Northfield referred to the low investment, the low productivity, the high unit wage costs and the low profits in West Midlands industry. The Secretary of State assumed his office not long afterwards. Looking at his record, I have to ask what the Department has done to assist industry in the West Midlands. What notice has been taken of the representations by the West Midlands planning authorities' conference and by the West Midlands County Council, which have drawn attention for over a year to the serious structural weaknesses in the West Midlands economy and to its heavy dependence on the motor industry? That dependence has been increasing in the past few years despite the decline in the motor industry.
It is against that background that I wish to consider the Secretary of State's decision to move the Avenger production line from Ryton to Linwood. Before coming to that I should like to refresh the right hon. Gentleman's memory about the representations by the West Midlands planning authorities' conference and the current developments in the economy of the West Midlands. The crisis in the motor industry has coincided with a number of fundamental weaknesses. There is a need not merely for retraining, but for the restructuring of industry in the West Midlands so as to provide the centres of growth now so sadly lacking. Policy must surely recognise the need to concentrate our industrial resources and undertakings where the infrastructure and the skills exist. We must not persist in the policy of dispersion which has so gravely weakened the West Midlands.
The West Midlands area has been described as the heart of the British economy. It is, in the words of the Observer of just a year ago, "the workshop of Britain". The Observer went on to say that that workshop was "bleeding to death". The area accounts for 33 per cent. of this country's exports and for 53 per cent. of the manufacturing industry. However, unemployment in West Midlands manufacturing industry has doubled in the past three years alone and total unemployment in the past years has trebled. At the same time the number of vacancies has been cut by a factor of eight.
This is the largest percentage increase in unemployment in the country. It represents the largest reduction in the number of vacancies in the country. Unemployment in the West Midlands as a result of the actions of this Labour Government and of the Department of Industry, which the Secretary of State heads, is now numerically worse than that in the North-East or Wales.
Against this background the Secretary of State has diverted from the production of the Avenger from Coventry to Linwood. Is he aware that manufacturing wages in Scotland are higher than those in the West Midlands? Is he also aware that the percentage of unemployed in manufacturing industry is higher in the West Midlands than that in Scotland? Is he also aware that people are unemployed for longer in the West Midlands than in Scotland? It is against that background that I have asked him to reconsider the policy of industrial development certificates as applying to the West Midlands and called his attention to the need to promote industrial growth in the West Midlands.

Mr. Tam Dalyell: We must be fair about this. The hon. Gentleman may know that I am critical of the proposal to establish a Scottish Assembly and so on. Nevertheless, he must bear in mind that the Linwood and Clydeside areas, unlike the rest of Scotland, are in a serious situation. I do not want to exaggerate, but the hon. Gentleman should view the matter in perspective.

Mr. Miller: I am grateful to the hon Gentleman. However, I hope that he will accept the figures that I have just given,


because they were substantiated in parliamentary answers to me last week. The matter needs to be viewed in the round. I accept that there are several difficulties, but I do not see how it can be justified to move a production centre from the West Midlands in its present situation to Scotland, except for purely political purposes. I believe that it was on those grounds that the Secretary of State voiced his doubts about the deal and it was on those grounds that he should have stood rather than giving in to the solution eventually evolved.
It is against that background and on those grounds that I decline to support the motion. I ask the Secretary of State once again what he proposes to do about the situation in the West Midlands. The Industry Act has done nothing to help, and the same will be true of the Bill to nationalise the aircraft and shipbuilding industries. I noted the right hon. Gentleman's total failure to object to the West Midlands County Council Bill, which contains a number of proposals that can bring only further damage to the region, although it is a measure supported by Labour Members.

5.21 p.m.

Mr. Eric Moonman: Although this re-run of the debate is no doubt somewhat embarrassing to the Secretary of State and perhaps to the Patronage Secretary, I am glad of it because it gives those of us who were not able to speak on the last occasion an opportunity to do so tonight. Furthermore, it has enabled some of us to examine rather closely the Government's statements in the record of that debate.
It is extremely important to convey to the Secretary of State that there are still some nagging questions about the Chrysler deal which need answering. That is what I wish to discuss. There are still elements of confusion about the original declaration of intent which caused some of us to want to probe it further in December and last week. Although many hon. Members have mentioned the worries and anxieties of unemployment arising from Chrysler, it is those with constituency interests who are most entitled to make that point. Others who do not have that direct interest have the responsibility of looking not only at the

use of resources being put into the Chrysler deal, but at the alternatives to it, if there are alternatives.
My anxiety about the declaration of intent which was submitted by Chrysler on 16th December is that it is so ambiguous. This tatty piece of paper was the basis upon which the Government decided to undertake an arrangement with Chrysler which involved them in giving funds and a major commitment. It is, therefore, no surprise that we should have expressed considerable doubt about the validity of the statements in the declaration of intent, and that we express and will continue to express those doubts. The reason is that I recall that the original declaration of intent by Chrysler was that it was a guarantee given to my right hon. Friend's predecessor that it would not take any action to disadvantage the British company in favour of other Chrysler subsidiaries.
What troubles me about Chrysler and the way it operates is that while we get these very doubtful declarations of intent, its actions, practices and procedures as a very hard-hitting company in the United States as well as here, tell a somewhat different story. This is surely the central point of the debate. It is not whether the Government were right to go ahead in the way that they did to protect groups of people from unemployment. That is undeniably a serious matter, but hon. Members who see it only in those terms are making a great mistake. I cannot believe that we as a nation can afford to bail out a backward company in a contracting industry. This question cannot be left only to the politicians. It requires a cool examination by all of our people in Britain.
This dilemma reminds me that we are talking about £160 million. The £160 million question is how to keep Chrysler afloat. I think that the Government have got it wrong. They were wrong because of the way in which Chrysler's American management exploited its advantage as a multinational company. The Government have got it wrong because of their inability to get adequate safeguards to prevent us from becoming just an assembly operation for French parts. They have got it wrong also because we have no real control over how the £160 million is being spent.
My hon. Friend the Member for Liverpool, Walton (Mr. Heffer) introduced a thoughtful approach and mentioned the structure in which the Government take decisions. This is a critical aspect. It is, perhaps, a pity that we must conduct this debate against the background of a procedural error and in what is becoming a very short debate. Getting the Government-industry relationship right has eluded Governments of both major parties, whether their basic stance has been interventionism or laissez-faire. The reason has been straightforward. In the past the tasks of the Civil Service were basically different from those of industry. The civil servant had little or no understanding of the principles of good industrial management. Evidence given to the Select Committee on Science and Technology 10 years ago showed that repeatedly. The two sides in giving evidence were miles apart in their understanding of industrial decision-making. They both used the same words, but their meanings and the implications of what they said were totally different.
The procedures necessary to safeguard the principles of public accountability and to avoid mistakes, even minimal ones, conflict time and time again with the need for dynamism and speed in developing advanced technology. Nowhere is the contrast of attitudes more apparent than in financial procedures. In industry budgeting has to relate to prices and marketability. No firm would last very long if it exceeded its budget as regularly as Government Departments exceed theirs. In Government the prime factor has been to account for every halfpenny of the money spent rather than to concentrate on keeping within the agreed expenditure. As the recent Report of the Select Committee on Technology demonstrated, this has led to annual expenditure of over £5 billion in excess of what was originally budgeted for. Overspending on this scale inevitably distorts the allotted priorities between Departments and must ultimately reduce the control exercised by Parliament.
As Government's rôle as the main source of industrial investment, either as a customer or a sponsor, has evolved, the effect of this passive accounting has shown itself in the need to raise more money through borrowing or taxation and

in the way that industry has handled public money. Successive Governments of both political parties have poured money into industry without requiring industry to use it in accordance with good management practice and without any specific knowledge or understanding of how the investment would affect the economy.
However, over the past 18 months it appeared that the Government were beginning to get their strategy right. They were beginning their various structural changes by concentrating on growth industries and by using the mechanics of the NEB and planning agreements. They were beginning to command the respect of management and to offer a secure future to the nation's work force.
That is why the Chrysler agreement was such a pity. It does not provide the answer to some of the questions we have been asking. Once again money is to be put into an industry without guarantees, and certainly not within the terms of reference that some of us argued for and which were accepted in last November's industrial strategy statement.
We may have saved most of the Chrysler jobs, but the nagging question still is, for how long? Of course, they will have been saved at the cost of our whole industrial strategy. Above all, this was a lesson in how not to deal with a multinational company. Throughout, Chrysler seems to have called the tune. It has been given security in its United Kingdom operations without its parent company having to give a binding commitment. I appeal to my hon. Friends who might take a different view on this matter to pay some attention to these questions, because the issue cannot be seen only in terms of immediate employment opportunities.
Are we as a Government prepared to take Chrysler over after the so-called make or break period in two or three years' time if it does not work out? If we were not prepared to take it over until now was that because we had no faith in British management? Then there is a critical operational point. There are those of us who represent constituencies which have different interests in the motor car industry and who are equally concerned about developments in the total manufacturing strategy and market. What percentage of the total


manufacture of parts will be performed in Great Britain? There has been the occasional vague reference and the Select Committee in the car industry has pursued this matter, but we still have no percentage allocation.
The profitable sector of motor car manufacturing is certainly not in assembly. I am reminded of the fact that we now know that from August, Ryton will be assembling Alpines from French-made components, using only one-third of the plant's installed capacity. This is another advantage of having a second debate within the week. We did not have that important piece of evidence a week ago.
Reference was made in the debate last week to the interest and concern of trade unions in Chrysler. That was both fair and accurate. Unions were not consulted on the details of the rescue operation, nor asked to contribute to a solution. This deal was made over their heads. Chrysler and the Government were only worried about their reaction to redundancies. The unions were shunned in the discussion on guarantees.
There are many lessons to be learned from what has happened. We must begin to set out guidelines for the way multinational companies operate in Great Britain. In the last 25 years we have shambled through our relationship with industry. If industry has felt that it has not been able to engage in a dialogue we must bear some of the responsibility. The new formulae and structures being devised, including discussions with the TUC and CBI, are very useful at one level of such debate, but that does not preclude the Government from meeting management within individual sectors of industry. There are many managers who like to have even an indication of the Government's intentions.
When dealing with a multinational company like Chrysler, which, to put it mildly, has a rather spotty record in this country, we have the right to say, that an intelligent monitoring of its plans and forecasts should take place on a regular monthly basis with the Government.
We shall not be able to decide in two or three years' time that we have reached a make or break situation. That is the view of the people in the City. It is not the view of a senior executive in industry. Industrial decision-making is not so

dramatic. What is likely to happen is that after two years or so we shall be confronted with an awful dilemma, probably requiring us to put in more funds and resources to keep the firm going. That is the whole story of high technology and of the motor car manufacturing industry.
I wish my right hon. Friend lots of luck in his dealings with the company. He will need not only luck, but a great deal of skill. He must ensure that the civil servants who advise him have some understanding of the problems which, outlined in these two debates, reflect the deep concern and competence of management and the trade unions.
There must be a new set of guidelines for the way in which our country, which is not all that big, negotiates with a company which is rather important in its world-wide rôle and can shift resources from one part of the world to another. Chrysler will make its decisions according to its own profit and loss account which is rooted in the United States. I am not being anti-American when I say that. I understand their criteria and their motivation. The question I have to ask myself is whether I can honestly say that I understand the criteria and motivation of the Government in their industrial strategy.

5.34 p.m.

Mr. Michael Marshall: It is always a great pleasure to follow the hon. Member for Basildon (Mr. Moonman). He raised a number of questions which the Secretary of State failed to answer in the debate last week. I shall not seek to re-hash those questions. The hon. Member for Basildon posed them with considerable force and clarity. I agree with much of what he said and I look to the Secretary of State for detailed answers.
It is the burden of my charge in considering whether the Secretary of State should have his full allowance restored that we have to consider his recent performance in these matters. The best evidence is what he said in the debate last week. I am sorry the Secretary of State is not here at the moment, because I wish to address a number of points to him. I hope that the Minister of State will ensure that in winding up the Secretary of State gives us some further assurances in the light of the contradictory and misleading thinking now prevailing


in the Government's policy towards industry.
The whole basis of the Secretary of State's speech last week was to fall back on that tired old defence mechanism of attacking the Opposition. He implied that the Conservative Government, through their operation of the Industry Act 1972, did not measure up to the ideal criteria that we are now advocating. If it helps the Secretary of State, I am quite willing to admit that no Conservative Government have been perfect and that they have all made mistakes. I only wish the Secretary of State and his colleagues would be equally frank in admitting that this Government have made some major mistakes. It would be helpful if from time to time they were prepared to come clean and admit it.
The Secretary of State's rôle in the Chrysler affair has been a powerful and well-documented one. We found it intolerable that he should try in last week's debate to brush aside his known attitude and adopt the rôle of attacking the Opposition. He seemed more concerned with making references to possible unemployment in Coventry. He was more concerned about by-election points than about the Government's industrial strategy. It was his refusal even to consider this matter, a refusal which was perfectly plain to all hon. Member's who took part, that was so objectionable. In a moment of breathtaking candour, he admitted precisely what he was going to do. He said:
I do not wish to go into sterile arguments about criteria for British industry."—[Official Report, 11th February 1976; Vol. 905, c. 474.]
It is breathtaking that the Secretary of State should come here and say that he does not wish to talk about the criteria governing the Government's activities in British industry.
Leaving aside the imperial pomp of his preamble, how could he possibly refuse to address himself to a motion which he knew was a censure upon himself and his colleagues? There was some fiddling and fussing over the terms of the motion, but my hon. Friend the Member for Bridgwater (Mr. King) made clear that the original motion was on the Government's failure to observe their guidelines in respect of State investment in the

motor industry. The Secretary of State tried to argue on a technicality because the title on the Order Paper was:
State Intervention in the Motor Industry
I do not see how he could expect us to accept that he was not prepared to argue about that Government's own criteria. I am glad to see the Secretary of State has now returned to the Chamber. I wish to ask why he was so unwilling to discuss these criteria.
Evidence was provided from a somewhat unusual source in the "World in Action" television programme last week. The Secretary of State was somewhat shy and made no reference to the programme, in which leading journalists had obviously got together to put forward their view of what happened at the Cabinet and Cabinet Committee meetings at which the Chrysler situation was discussed. The Secretary of State is too modest. He is failing to give himself the backing he should have if he wishes the motion to be accepted. The whole tenor of that "World in Action" programme was that the Secretary of State was the "good guy", fending off the "baddies" and showing more zeal in defence of long-term employment prospect in industry and of the taxpayers' money than were many of his right hon. Friends who argued from a more politically motivated basis.
Nothing has been said by any of the right hon. Gentlemen portrayed in that television programme to suggest that the general basis of the arguments then put forward was unfair. I shall refer to three basic arguments presented in that programme, and I invite the Secretary of State, if he feels that they are an unfair representation of the Government's view and his attitude, to say so.
The first was that the Secretary of State had made clear his view that acceptance of the Chrysler deal would make a nonsense of the Government's industrial strategy, the Chequers strategy and the criteria to which the motion was addressed. The peculiar absurdity of trying to subsidise two parts of a declining industry is evident to all. Government supporters—with whom I do not necessarily agree—who seek a public stake in the money which went into Chrysler at least have some logic in their argument.


But the notion of putting money into two parts of a declining industry is nonsense, and the right hon. Gentleman was right to make that argument.
Secondly, it is clear that the Secretary of State's argument was that there would be no guarantee that Chrysler would ever make money, that, indeed, the likelihood was that the company would be back for more, as the hon. Member for Basildon said. In the debate last week the Secretary of State reiterated his view that there was no guarantee that Chrysler would ever make money.
Thirdly, the argument with which we are left as peculiar to the Secretary of State's stand is that if he had to accept the Cabinet decision, he must be allowed to carry that decision to the House.
I take the last argument first. The Secretary of State came to the House, took a good deal of the opprobrium upon himself and showed a broad back to the set of weights put upon him. Equally, he confirmed to the House, as reported in column 473 of Hansard, that he did not see Chrysler reaching a position of profitability. So the right hon. Gentleman was consistent in his basic argument when he came to the House last week. He failed signally to reaffirm his argument that the subsidisation of Chrysler was a nonsense in the context of the Government's overall strategy.
The failure of the Secretary of State last week to make his position abundantly plain was a great tragedy. It would have been possible for him to have used a form of words which gave some indication of the truth. His evasion of that basic argument makes it difficult for us to consider the motion as sympathetically as some of us might wish.
I shall end on the more charitable note initiated by my right hon. Friend the Member for Yeovil (Mr. Peyton). We are all conscious that the Secretary of State for Industry is the "fall guy". He is the "front man" in this exercise in which the real villains are the Prime Minister, the Chancellor of the Duchy of Lancaster and other right hon. Gentlemen in the Cabinet who failed to uphold the logic or to accept the sense of the arguments put forward by the Secretary of State.
It is, therefore, with a sense of regret that I feel that we have to stick to the

motion which we passed last week and, therefore, to reject the Government motion tonight. If the Secretary of State is unable to speak loud and clear tonight, we can perhaps take his silence to be appreciative of the way in which we are backing up the basic arguments which he has been attempting to carry. The motion of censure which I believe we shall deliver once more will be not so much upon the Secretary of State as upon his right hon. Friends. We shall be censuring the whole shabby, shoddy and thoroughly disgraceful way in which Government, by leakage and a colander Cabinet, bring the House and the country into disrepute.

5.45 p.m.

Mr. Tom Litterick: We are addressing ourselves to the Government's conduct of industrial policy against an extraordinary background. We should remind ourselves briefly of that background, for otherwise we might fall into the trap, which the Opposition would like the whole country to fall into, of believing that Britain is peculiarly affected by all the economic calamities with which we are familiar.
We are, I suppose, at the climax of a a dreary series of collapses in the private sector throughout the northern hemisphere, sparked off by the collapse of banks and insurance companies and followed inevitably by the collapse of manufacturing organisations. We, the British, have had to endure our part of that general calamity which befell the capitalist private sector in the northern hemisphere. There was a general contraction of trade followed by bankruptcies of hitherto "blue chip" companies, and organisations to which the gamblers opposite happily passed their money in the full expectation of getting something for nothing turned out to be bad bets, so that everyone got red in the face and started hollering for Government help.
Not just the Pennsylvania Railway Company but big multinational capitalist organisations were whining to the State and spitting in the face of their traditional philosophy of "Stand on your own two feet; do it on your own, lad, and be independent". That meant being independent until it suited their game to dip their spoons into the public trough, which they all proceeded vigorously to do. They told each and every developed nation of the northern hemisphere that if


the taxpayers did not fork out, they, the taxpayers would suffer. In America, which is ruled by Tories, in France, which is ruled by Tories, in Italy, which is ruled by Tories and in Germany, which is ruled by Tories, again and again the taxpayer was asked to bail out capitalism—or else.
That brings me to the specific case of Chrysler and the British car industry. That was a specific example of a tatty bit of capitalism that sent out its Indian scouts and said to the British public "If you do not give us a lorryload of money, we shall do you a great mischief". It was against that bleak background that the Government were obliged to negotiate with emissaries of the Chrysler Corporation, already having had to bail out the gigantic Leyland Corporation.
Exercises in public intervention are spontaneously and generally welcomed by the people who work in the industries concerned, because by the time the State intervenes the people who own and control the companies have already made clear their intentions—namely, "We shall make you unemployed". Despite the carping remarks of Tory Members in constituencies round the Longbridge area, they dare not openly oppose the Government's intervention in British Leyland.
However, they want it both ways. They want to talk out of both sides of their mouths at the same time and convince us that the fate of the country—indeed, the fabric of christian civilisation, for some of them go that far—depends on their being able to put their money into a blue chip company in the hope of getting something for nothing. That is the essence of their argument. Of course, it is entirely bogus.
The Longbridge workers knew that if the public did not intervene in the affairs of British Leyland, their fate was well and truly settled to their disadvantage. The same is true of Chrysler. In other words, one would have to be extremely bigoted to have a basic aversion to intervention in either British Leyland or Chrysler.
The argument should centre round not whether we should intervene, but the manner in which we should intervene, bearing in mind that the Tory Governments I have mentioned, in France,

Germany, Italy and the United States, have intervened on a huge scale to bail out companies with international reputations. They each did it in their own way. In my view, some of them did it stupidly in terms of the public interest. However, that is their affair. I am speaking about the behaviour of Her Majesty's Government towards the British car industry.
We must ask ourselves first whether we are getting a reasonable return for the money which is going in. At once I state my difference of view from hon. Gentlemen opposite in posing that question. Many years ago I should have put that question in balance sheet terms. However, I do not put it in balance sheet terms today. I put it in social terms.
Last week it was clearly stated, and it is beyond dispute, that the approximately £70 million of public money which is likely to be expended as an investment in Chrysler cannot match the certain expense to the Exchequer if 50,000 workers were unemployed. If hon. Gentlemen opposite want to talk in terms of simple things like payback periods, I assure them that the payback period on that investment is less than two years, based on a fairly conventional mode of calculation in the private sector.
We are seeking to be convinced that there is public control over the investment in and organisation of Chrysler and that it will continue for a long period as a place at which people can work and make a living. We cannot yet have total confidence that that is so. I suppose that hon. Gentlemen opposite will be at pains to assure us that we could never have total confidence in the permanence of a commercial or industrial organisation because, after all, their justification of profit—I trust that they know this—is based on the existence of that uncertainty. Therefore, they cannot have it both ways here. I do not think that any of my hon. Friends will argue in terms of certainty. By the same token, I do not think that hon. Gentlemen opposite should mount criticism on the basis of lack of certainty. The absence of uncertainty would totally destroy their argument for their system.
I am concerned about public accountability, which has a lot to do with a manner in which the deal was made. It was made in haste and in panic. My


impression is that the Secretary of State was not entirely satisfied with the deal which emerged.
There is little evidence, as yet, that the will, the attitudes, opinions, knowledge and skills of the workers concerned are considered to be a serious part of the Chrysler organisation and its future. There may be other matters about which we shall learn from the Secretary of State, but the evidence is not encouraging. In fact, it is to the contrary.
My information is that the management of the Chrysler organisation is using this unusual transitional period as an occasion for trampling on long-standing industrial agreements. The workers are being pressed to ignore practices which have been established by agreement. The company is still operating on a hand-to-mouth basis. It is under growing pressure from suppliers who are still refusing to meet Chrysler's requirements for components. I have been advised that components manufacturers are apparently meeting only half of Chrysler's current requirements. This is happening at a time when people are being made redundant in the components industry. Most of the famous names in motor car components manufacture are involved.
I know that during the period of great uncertainty leading to the deal with the State many components suppliers deliberately choked off supplies to Chrysler. In a sense, one can understand, because they did not know whether they would be paid. But, notwithstanding the deal with the Government, this situation is still going on.
One cannot help but arrive at the tentative conclusion that these components suppliers, who are themselves multinationals, are concerned to use the Chrysler deal as an occasion to benefit their subsidiaries abroad by forcing Chrysler into a desperate situation in which it will be crying out for components from wherever—Italy, Germany, France—at the expense of our balance of payments. This is one aspect of the deal on which there is virtually no hard information.
We have always known that Chrysler's policy was to use a large proportion of bought-in components in all its manufacturing activities in this country. We have heard nothing so far from the

Government to indicate whether that strategy will change. Incidentally, many aspects of British Leyland's policy in this respect need close scrutiny. British workers are being made to suffer unemployment because British Leyland is allowed—I use that word carefully—to buy abroad what could easily be made here by unemployed but very skilful workers. I should appreciate the Secretary of State's response to that point, which I made to him some time ago when he may have needed time to obtain the information.
I am aware that intervening in one part of a multinational company's acivities is not the most comfortable exercise. It is akin to trying to tame a tiger by pulling out one claw at a time: one might just get eaten alive in the process. The Government decided on this course of action. Therefore, we are entitled to mount the most rigorous critique of every development, knowing full well that Chrysler's commitment is not to the British economy and certainly not to the British people, but to itself. I doubt whether it even regards itself as American.
It seems a characteristic of multinational boards to see themselves as global citizens. They might be more fittingly accommodated in a satellite going around the earth than located at any point on the earth's surface. At least that would have a certain poetic accuracy. But these people do not wish to attach themselves to any nation at all, or to be held accountable in any significant degree, because they want to retain the freedom to shift resources anywhere on the world's surface. They may rationalise it, but the British people live nowhere but in Britain. They have to look to their own interests and if that means colliding with the interests of Chrysler, so be it: we must do so.
I doubt whether Chrysler United Kingdom will last much longer in that form, either because we shall quickly discover that Chrysler is robbing the British taxpayer by using this deal to finance its European operations, or we shall pre-empt any action by the corporation by integrating Chrysler United Kingdom with the rest of the publicly-owned part of the motor industry.
Since we are talking about accountability and responsibility, we should be


talking about democracy. So far, we have heard little about the Chrysler business which involves democracy. But one notable fact has emerged—that the workers are not to be charmed or seduced by rhetorical flourishes, by the use of words and phrases like "participation" and "industrial democracy". They know too much. They know, in the words of a failed French banker, or a multinational company manipulator, that these phrases and words are simply another way for him to get away with the workers' consent or apparent consent.
As hon. Members should know, there has already been an attempt to foist a spurious form of industrial democracy on the Chrysler workers, which they quickly repudiated. I am sure that hon. Members know that there are difficulties at Leyland. The workers are not impressed by the kind of phraseology used by public people who will never be involved in the transformation of an authoritarian system or who, if they are involved, are at the top of the system and have a vested interest in its not being transformed.
Therefore, given the fact that the Secretary of State—I believe that he was gravely mistaken—could not seriously consider the Chrysler workers' own proposals for the restructuring of the organisation, he should soon show evidence that there is a dynamic in Chrysler which is moving towards the creation of a new type of industrial community, underpinned by public intervention, which is being given a guarantee that never again will a Minister of the Crown intervene, as the Secretary of State recently did, in an irresponsible way in a dispute between workers and the management of Chrysler with a judgment based on faulty information. That intervention betokened a failure to understand not only what was going on in Chrysler, but his rôle and that of the State in relation to Chrysler.
The behaviour of the hon. Member for Henley (Mr. Heseltine) was wildly irresponsible. He betrayed an abysmal ignorance of the true situation at Linwood at the time. That kind of intervention by remote public people does no good at all. Brandishing rhetorical remarks about good order and discipline never helps in an industrial dis-

pute. It is time that we got rid of this mentality towards industrial relations, which is really based on the old "good order and regimental discipline" mentality, that the other ranks are there to do as they are told or to be conned by a sweet-talking officer. We are moving quickly into a new industrial society in which workers are rightly inclined to say not just "Why?" but "Who says so?" and not to be deferential.
The most important thing that I want to hear from my right hon. Friend is news that the method of government within Chrysler is changing. Then I might have more confidence in the future of the Chrysler deal and this party's industrial policy.

6.5 p.m.

Mr. Nicholas Ridley: I hope that the hon. Member for Birmingham, Selly Oak (Mr. Litterick) will forgive me if I refer to some of his remarks not at this stage but towards the end of my short speech.
I regret that the hon. Member for Keighley (Mr. Cryer) is not here. Indeed, at the time that he graced this debate with his presence more was spent on his feet than on his bottom. He made the most partisan and callous speech I have ever heard. His bogus compassion for those made unemployed in the course of the decline of manufacturing industry was revolting to one who feels that unemployment is a tragedy whether one is in the Armed Forces or civilian support of the Armed Forces, the small business sector, the professions or manufacturing industry.
The idea that workers would find it attractive to be told as they join the dole queue that this is part of Socialist planning to move resources out of the pits and into industry is something of which the hon. Member should be deeply and abjectly ashamed. I hope that in pursuit of a full employment policy the hon. Member will not impart political prejudice against the defence of this country to the extent that he showed today.
Five hundred people in my constituency are being made redundant as a result of the closure of an Army depot. I shall not plead this case in the emotive terms that the hon. Gentleman used. I shall merely say that perhaps those people would be better employed maintaining the vehicles of the Army so that, if there were


an emergency, if our democracy were threatened, from whatever quarter, they would be available to help in the defence of these islands. Perhaps that is marginally a better use of those people than that they should make smart saloon motor cars which no one at present wants to buy and which consumer far more raw materials than does the maintenance of Army vehicles. So I reject utterly what the hon. Member said.
This debate should be about the reduction of the Secretary of State's salary. I endorse the statement that nothing personal is intended. I remember telling him when he first became Secretary of State that his present post was the modern graveyard of politicians, as the Ministry of Agriculture used to be.
Since last Wednesday, has his salary been reduced? It was the will of the House that it should be. If the Division tonight is won by the Government, he can go back to his full salary, but for four days his salary should have been reduced by £1,000 a year. It will have cost him only a few pounds and after tax it will be no more than the price of a couple of whiskies and sodas, but just as a token of obeisance to this House his salary should be cut. Otherwise, he will be lacking in respect for the sovereign institution in our constitution.
The Government's attitude in this whole matter has been obnoxious. The Government Chief Whip, who said that the Government did not accept the decision of the House, portrayed a mood which has run throughout this Government since they came to office. I am delighted that that remark has been withdrawn, but I cannot help referring to it because it is symptomatic of the way in which this Government regard Parliament.
Parliament is a strange institution and it has that quality of supremacy over the Executive which has preserved us from tyrants over the years. It was because the monarch, Charles I, said the same thing that he got into trouble. Like the Patronage Secretary, he said "I do not accept the decision". As a result, he had a certain amount of trouble. It is the desire of the Government to use this place as a rubber stamp, or as a sort of sausage machine through which their Bills, mostly containing offal, are churned out.
The hon. Member for Blyth (Mr. Ryman), who is unfortunately not present, was summoned by the right hon. Gentleman the Patronage Secretary on the radio to come here and vote. I happened to be listening to my car radio and heard him. The Patronage Secretary said "Where are you, John? If you are listening, I want your vote", as if he were a sergeant-major. The hon. Member for Selly Oak spoke of good order and military discipline in industry. The good order and military discipline among Labour Members is far more autocratic and arrogant than anything that has ever existed in any of our industrial companies.
A further example is the £915,000 which the right hon. Lady the Secretary of State for Prices and Consumer Protection has spent upon little bits of sticky paper to be affixed to various goods in the shops, showing goods which are supposed not to be going up by more than 5 per cent. in the next few months. The prices of most of those goods will go down anyway, so the right hon. Lady's action has only added to the cost of living. However, that subject is out of order, Mr. Speaker, and I shall not pursue it.
Who came to the House and asked us for £915,000 to spend on that? Where is the legislative authority for this little extravaganza—this little spending spree by the right hon. Lady? When shall we be allowed to defeat the Government and be asked to give approval to all of these little follies?
People in the country want us to defeat the Government sometimes, not because we are in opposition, for when the Labour Party is in opposition, the public want it to win sometimes. We work very hard. We come here four and sometimes five days a week. Sometimes we sit up and vote all through the night and go through hair-raising drives to get here in time. Hon Members have to come in ambulances to vote, as the Leader of the House pointed out, so that one side may win. That is why we come. We do not come because the sergeant-major on the other side tells us that we have to come. We come because we feel strongly about something and want to beat the proposals before the House.
Millions of people in this country pin their faith on our winning. Therefore, it was immensely depressing to be told when we won "Oh, we shall wipe the


slate clean by putting that right next week. You are not allowed to win. The rules of the game are that we always win". That is what the Leader of the House says. That makes a mockery of democracy. Labour Members have referred to democracy in relation to this debate, but the purpose of the debate is to overturn a democratically-reached decision of this sovereign Parliament. I have never heard such a travesty of reality.
Parliament is not held in high repute. If we are to fail to beat the Government on anything, democracy has no point. The virtue of this debate is not whether the salary of the Secretary of State for Industry should be reduced by £1,000. The debate gives us an opportunity to point out that unless at some time the Government listen to what people say, take note of the strong expressions of opinion in the country and allow the House to beat them, whether by giving way or by accepting the majority when sometimes it comes up against them—as it did, by accident I know—Parliament will no longer be respected.
The ability to rescind decisions, as my right hon. Friend the Member for Yeovil (Mr. Peyton) said, is something to be carefully guarded against. Let us suppose that the moderate members of the Government decide to leave the Government and fail to support them and let us suppose that the vast build up of discontent and unhappiness in many people's minds finds vent in a defeat for the Government on a motion of censure. Should we be told that the Government did not accept the verdict of the House, or that there would be an opportunity to put it right on a censure motion? Cannot the Government understand that they have to be defeated sooner or later because that is what Parliament is for—to defeat them when they are wrong?
Lastly, I turn to the issues of industrial policy about which we have spoken. Right hon. and hon. Members opposite must look at the figures and the facts. This country's industrial performance is steadily worsening. Unemployment is the highest in living memory. The volume of industrial production has dropped 10 per cent. since the peak three years ago. The average industrial wage in real terms—that is, what it will buy

—is now falling for the first time. Last year's wages bought less than those the year before. We have a dwindling industrial sector. It is palpable rubbish to say that this is a crisis of capitalism. It cannot be so, because the Government have done things to industry—and, to be fair, I should say that when my right hon. Friends were in office they did some pretty silly things—which could be responsible only for the relative decline of British industry compared with that of Japan, West Germany, or any other free enterprise society.
Are we ever told how marvellous Russian industry or Bulgarian industry are or how marvellous the East German tailoring industry is? Why are we not told about the marvels of the Communist society which the Government try to emulate? No, this is a crisis of Socialism. The evidence is everywhere. Whatever part of society we look at we see that the theories, the airy-fairy ideas that hon. Gentlemen and others have put forward and on which they came into office with such bright-eyed excitement and naivety, have proved to be disastrous failures.
It is all the more important for the Government to listen to what people are saying and to what is being said in the House. They must realise that with a majority of one and with only 38 per cent. of the popular vote behind them they cannot go on steam-rollering through these strange ideas which motivate them and which are based partly on bitterness and partly on inexperience. The Government go on steamrollering these ideas through, because sooner or later the system will crack and the only way that these cracks can be prevented is by accepting not only the decisions of the House but the emotion, feeling and political will which are abroad in the country. Any Government who ignore public opinion do so at their peril.
The really tragic thing about last week's events was that the Government did not understand that there are times when one has to give way. There are times when one may even be wrong. The way that the Leader of the House comes to that Box, hatchet-faced, severe and unbending, week after week, to tell us that the Government cannot give an inch on this or on that, and cannot possibly accommodate the Opposition on this or the


Scottish National Party on that, and the way that we are being told what we have to do, is intolerable to people who believe in a free Parliament, the free expression of will in the country.

Mr. Litterick: You are a lousy loser.

Mr. Speaker: Order. First, the hon. Gentleman's expression was unparliamentary. I hope that he will withdraw it. Secondly, it was made from a sedentary position. The hon. Gentleman may like to withdraw the remark.

Mr. Litterick: I apologise for any offence to yourself, Mr. Speaker. Perhaps I should rephrase it. The hon. Gentleman is a bad loser. That is what I was moaning about.

Mr. Ridley: I had not understood that I had lost or that we had lost. I have not become aware of what we have lost, when we have lost it, or why we have lost it. I only say to the hon. Gentleman that he has had his chance. He has had the first two years of the present Government, and they are driving this country into the sand. He, if anyone, has lost, because it is almost impossible to retrieve the fortunes of a Government if they get into the position of the present Government.
Our turn will come. We may get it wrong again. However, the lesson to be learned, which is perhaps the hardest of all for people who believe as strongly in ideals as do Labour Members, is that when things start to go wrong, it is usually because one has not listened, one has not been prepared to see and to understand. Indeed, it is a failure of democracy, a failure of worker-participation on the Government side of the House and of the very virtues which Labour Members have been extolling for others to pursue but which they have not pursued themselves. That is the symbolism behind this debate.

6.23 p.m.

Mr. Sydney Bidwell: In honouring the request to speak for only a short time, to enable the Front Benches to have a full half-hour, I am left with very little time to say what I wished to say in a debate of this kind when I sought your ruling, Mr. Speaker, at the beginning of the debate about what range of events the debate could cover.
As regards the speech of the hon. Member for Cirencester and Tewkesbury (Mr. Ridley), the House is always entertained by what he has to say. He is something of a not-too-oldish, old-fashioned Tory, especially if he thinks that what the present Government are doing has much relationship with what we deem to call old-fashioned Socialism. It is because of that that I want to make a couple of comments, which will have to be very swift. I want to use this occasion to ventilate a considerable constituency grievance concerning Leyland and affecting the AEC factory at Southall, which is the largest of the factories in my constituency.
I also want to say why, on the question of the unprecedented event in which we are taking part—a second bite at the cherry as to whether a Minister's salary should remain as it is now or should be restored to what it was a few days ago—I cannot bring myself to the view that this particular Minister should be singled out. I do not find the hon. Member for Cirencester and Tewkesbury to be obnoxious personally, but I find the Opposition's attitude obnoxious in seeking to use this means of attacking the Government on a very important front of their policy domain—industry—by using firstly the device of seeking a reduction of the Minister's salary. I would not single out the Secretary of State for Industry for particular attention in this regard, because the Opposition's attack should be, if the Government are faltering—as I believe they are—a measured attack upon the Government as a whole.
Although I cannot bring myself to vote against the motion, I have a very open mind about whether I shall vote at all, because I am very unhappy about whole aspects of the Government's policies. I am particularly unhappy about the continued imprisonment of Des Warren under unprecedented usage of the conspiracy law, and I am unhappy about the usage of Lord Ryder as Chairman of the National Enterprise Board. I do not know what particular body of the Labour Party——

Mr. Speaker: Order. I do not want to make the hon. Gentleman more unhappy, but I do not think that they fall within the responsibility of the Secretary of State.

Mr. Bidwell: Well, they do in a sense, Mr. Speaker, with great respect. However, in view of the time factor, perhaps I should try to explain that to you later.
I find the whole idea of bailing out a multinational company—taxation without representation, in the case of Chrysler—completely abhorrent. I find that in many ways the report on Leyland, as far as it affects the workers, is totally unsatisfactory. The amount of participation by workers in the running of the motor industry will be raised, inevitably, time and again, because fortunately the workers in the industry are very well organised indeed.
What I particularly want to discuss now is the situation as it affects the AEC factory, part of the Leyland group, in my constituency. Its staff has recently been reduced, under a voluntary redundancy scheme, from 2,600 manufacturing workers and 700 on the staff to 2,000 manufacturing workers and 600 on the staff. That is a considerable percentage reduction in personnel. At the same time we still have the old slogan "AEC—the proud builders of London's buses" alongside the Western Region of British Rail.
Perhaps I could put the matter best by quoting from a recent communication from the Ealing Trades Council embodying a resolution carried this week by the draftsmen's union, part of the AUEW. The resolution states that the union's divisional council wishes
to remind the Government that it cannot properly discharge its responsibility to the British taxpayer in respect of the public investment in British Leyland unless there is Government involvement in the management of the company.
That is what makes the remarks of the hon. Member for Cirencester and Tewkesbury such old-fashioned remarks. He thinks that mere State intervention is Socialism. That is not necessarily so at all. We think that in earlier history the great State intervention in affairs, in Germany under Hitler, was not Socialism as the Labour Party ever conceived it. It was called National Socialism, but it was Fascism on behalf of German capitalism.
The resolution to which I have referred says:
This publicly discredited management"—

it means, of course, the previous, pre-nationalisation management, and it means substantially the present management, because the present management is the management which ran Leyland on to the rocks—
is currently operating a phased closure of Leyland's AEC plant by decimating the production facility and adopting sales policies which promote vehicles from other Leyland plants at the expense of those built at AEC, a practice which has caused many AEC customers to buy foreign vehicles.
The AEC had a very proud name and position in the export market.
The resolution also says:
It is the belief of this Divisional Council that as a producer for over 50 years of top quality trucks and buses and a major export earner, AEC, situated in a high unemployment area, qualifies as one of Britain's winners.
The feeling of the union is that gradually the plant will go out of existence altogether. It is nonsense when one considers the shortage of buses in London and the fact that the Greater London Council has to go overseas for component parts. It is nonsense for the local Labour movement and for the GLC, which has been making many overtures on this question.
I led a deputation of local people to see Ministers at the Department, and I am glad to be able to take this opportunity to say a word or two briefly to the Secretary of State himself. This matter was also raised at the last Labour Party conference, when it was emphasised that we have a ridiculous situation of under-usage of a truck and bus factory which, to be sure, needs a great deal of modernisation but which ought to be kept. We now have a situation in which there is a run-down of manufacturing industry in London as a whole and in particular the disappearance of light engineering jobs which could mean job opportunities for the whole new coming generation of young people, apprentices and so on. I ask the Minister to pay rapt attention to this grievance of the people of West London.

6.31 p.m.

Mr. Michael Heseltine: This debate has covered a very wide range of matters. May I say at the outset that I would like to associate myself very much with the remarks of my hon. Friends the Members for Halesowen and Stourbridge (Mr. Stokes) and for Bromsgrove and


Redditch (Mr. Miller) on the plight of the West Midlands, to which they drew attention. No part of the country is suffering more from the present industrial malaise than that area, which has been widely regarded over a long time as the heartland of British manufacturing industry. Their pleas on behalf of their constituents brought a sense of reality and urgency to the British industrial manufacturing decline, as it is seen in the West Midlands, which was sadly lacking in the observations of Labour Members, who seemed particularly concerned to involve themselves in the rhetoric of old-fashioned polemics.
The contribution as a whole of the hon. Member for Basildon (Mr. Moonman) was, I thought, relevant to a subject we should have been discussing at greater length in this and earlier industrial debates. I disagreed with him when he sought to place on the shoulders of the Civil Service the blame for many of the decisions that had been taken about industrial strategy. That is to add just one more alibi to the appalling record of the failure of the political system in this country to get the right kind of industrial decisions taken and to listen carefully to industrial voices in reaching those decisions. It is a political failure, not a failure of civil servants, which has led this country's industrial investment record to such an appalling level over the past 20 years, and it does not serve this House any good at all to expect civil servants to act independently of their political masters. If we have got it wrong, let us understand that it is our responsibility and accept that the change, if it is to come, will start here and not in Whitehall.
While I agreed with much that the hon. Member for Basildon was seeking to achieve, I totally reject the idea that there can be a renaissance in the Civil Service which will bring a new sense of purpose to British industrial policy-making.
The hon. Member for Keighley (Mr. Cryer) spoke for a very considerable time at the beginning of the debate discussing the problems of Chrysler. His words could have come as nothing but a shock to the Secretary of State for Industry, who listened to what he said, because the message that the hon. Member had for us was that the rescue of Chrysler was

really to be desired, that the Government had worked out a strategy for the motor industry, that the arguments had been well rehearsed and deployed, and that in the better interests of British manufacturing industry the Chrysler rescue was right in terms of employment and of the balance of payments. Had he gone on longer, he would no doubt have pointed to the strengthening of the multinational corporation system as a beneficiary of the Chrysler rescue.
The difficulty that the hon. Member for Keighley faced was that the Secretary of State for Industry does not believe a word of it; and every time the hon. Gentleman argued in favour of the Chrysler rescue he was arguing against the case deployed with such persistence but to such little avail by the Secretary of State, who knows that the arguments brought forward by the hon. Member for Keighley had no validity whatsoever. It was extraordinary, therefore, that he should be seeking to defend the Secretary of State for Industry today for arguing a case in which, it is well known, the right hon. Gentleman himself has no faith whatsoever.
The House has always had recourse to a traditional weapon where it wishes to show displeasure about the record of a particular Minister—that is, a motion to reduce the Minister's salary by a nominal amount. Inflation has taken the amount higher and higher. The level of £1,000 behind the particular motion we are discussing today is a reflection of changing money standards rather than any personal reflection of the failings of the Secretary of State when compared with earlier motions for lesser sums. My right hon. Friend the Member for Yeovil (Mr. Peyton) dealt clearly with the constitutional background which has brought us to this debate, and I would not wish to add a word to the admirable case he deployed in his speech. The constitutional case is perfectly clear, and on that alone the motion which we are debating would deserve to be rejected.
The issue, however, is not just a question of the propriety of a Government seeking to change a decision of the House in less than one week. The issue, as one hon. Member after another has said, is whether the industrial policies of this Government justify the censure passed last week, which we would seek to uphold


today. It was particularly interesting to listen to the speech of the hon. Member for Ealing, Southall (Mr. Bidwell) and to note that the case he deployed for the Secretary of State for Industry was not that the right hon. Gentleman should not have a reduction in salary of £1,000; that was not his case. His case was that the remainder of the Secretary of State for Industry's colleagues were at least as bad as him, if not a great deal worse, and that, therefore, it was unfair to single out that right hon. Gentleman, whose crime could in no way be said to be greater than that of any of his colleagues.

Mr. Bidwell: rose——

Mr. Heseltine: The one conclusion which all of us who have listened to this debate today must draw from the arguments deployed is that, had the motion put down last week not singled out the Secretary of State for Industry but sought to reduce the remuneration of the entire Cabinet by £1,000, the Opposition would have won not by 10 votes but by a landslide.

Mr. Bidwell: Can the hon. Gentleman say what particular Secretary of State for Industry he has actually liked?

Mr. Heseltine: We could all agree on that. We all like the Secretary of State for Industry. That has never been an issue. Indeed, he is one of the nicest Secretary's of State for Industry anyone can remember. But that has absolutely nothing to do with his record as an administrator in his public position. The question is not whether we like the Secretary of State for Industry but whether we approve of a record which has taken British manufacturing investment down to the levels of the early 1960s, which has left 1·4 million people in the dole queues and created the greatest collapse of confidence in British industry in the living memory of anyone in this House. The question is not whether the Secretary of State is a nice chap. That has nothing at all to do with the motion.
The argument is not only a constitutional one but is an argument of no confidence in the industrial strategy which this Minister represents when he comes to the House. It was because the industrial strategy had failed that the vote of censure was carried in this House last week.
I recall the background, of which the hon. Member for Liverpool, Walton (Mr. Heffer) was fair in reminding us and which brought this Government to power, and the difference between the performance and what we were promised less than two years ago. We were promised a new era of State initiative in the encapsulation of the dynamism of the National Enterprise Board. We were told that the aircraft and shipbuilding industries would receive a new sense of purpose and destiny if they were nationalised. We were told that planning agreements would bring about a new sense of partnership between industry and the Government. Those were the fine phrases which made up the background against which the Government's industrial strategy should bejudged.
No one accepting the standards laid down by the Government's own doctrine can now believe anything other than that the dogma failed and that the promises never developed into the performance upon which the Government's assumptions were based. That is the reality, so it is reasonable that this House should uphold the assumptions which led to the Division last week.
Not only has the NEB not taken into ownership any shares of the companies upon which it was based. It is actually arguing with the Government that there should be a capital write-off in the value of those companies before those shares are transferred to the ownership of the NEB at all. That is a new development. We have had many industries taken into public ownership, and most of them led to capital write-offs, but never before have we had a publicly-owned enterpries refusing to take shares into its own name because it thought that the Government had paid too much for the shares.
That is the position that the NEB is now arguing with the Government. The objectives under which the Board is to operate and the clear decisions without which it is impossible to know what its purpose is have not been published because the Board has not been able to reach agreement with the subsidiary companies to be transferred to it about the relationship between them.
Anyone who has watched the agony of recruitment to the public sector, now compounded by the continuing saga of


relationships between Lord Ryder and Sir Kenneth Keith, must realise the difficulties that the Board has already even before it has become effective in any form. I do not think that those difficulties are capable of easy resolution.
Sir Kenneth Keith was recruited to the public sector—and he has been a conspicuous success therein—on certain terms about the basis on which he would operate. It is wholly the Government's responsibility that they have sought to change the basis upon which Sir Kenneth Keith and a significant number of the board of Rolls-Royce were recruited by making it into a subsidiary company of the NEB. Men of the stature of Sir Kenneth Keith will not work in the relationship of a normal subsidiary to a holding company situation under Lord Ryder. This is a simple human problem, and it is because the Government have failed to understand the nature of the relationship between these two men that they now have the situation where the national Press reveals saga after saga of inside disputes between the two.
This must have untold consequences for recruitment to the public sector. It must have done great damage in areas up and down the country where people are being asked to join the managements of nationalised industries for them to read in the Press every day of the problems with which they are likely to be confronted. It is a situation in which maladministration and a badly designed scheme are already running into difficulties before the NEB has effectively got under way.
The second area in which the Government are gravely responsible is the harm done by their decision to go ahead with the nationalisation of the aircraft and shipbuilding industries at a time when both industries have a range of different problems, all of them daily growing more serious. The Government have injected an element of uncertainty for two years in the future of those industries where those managing the industries were precluded from taking any decisions about the future of their industries and where there was no Government policy to fill the void. There is still no strategy for those industries after they come into public ownership. Therefore, the gap of two years has widened and the future of those industries has become more

uncertain. That is a major charge against the Government for which they should accept responsibility in the Division Lobbies.
I make only one final comment. It is that the greatest single charge against the Government is that, although they claim to be a Government who believe in strategic planning, they have no plans for the future of British industry. They have slogans. They have the document produced at Chequers. They have a long list of objectives to which they are said to be committed. Those objectives are all concerned with seeking profits. Hon. Members who have read the Chequers strategy will understand that all that it talks about is the desirability of getting the maximum rate of return on investment in the public and the private sectors and of giving British free enterprise systems the best opportunity to maximise their returns.
The Opposition criticise it because, if ever the chance comes, the Government remove themselves from the guidelines that they have set down. That is why Chrysler is so serious. In itself it is a situation which an economy of our size could survive, but as an example of how the Government abdicated from their guidelines it will have ripple effects, the cost of which is incalculable.
If the Government want to back winners, to seek profit and to give a new sense of enthusiasm and confidence to private sector industry, they should pursue a strategy which would return to British private sector industrial companies some part of the excess taxes which have been removed from them over a recent period of time. That is the only way in which there is any possibility of getting investment in British industry to move in advance of the cyclical upturn which will be caused by world trade conditions. If we wait until then, in my judgment we shall be left with the bottlenecks which have beset us in past economic situations equivalent to what could come.
If we want to get things moving faster, the only way is to back winners in British industry, and those are the companies which have made the profits in the first place. It is no use the Government thinking that they can single out individual companies on a piecemeal basis and get a sufficiently large-scale increase in


investment in advance of the general upturn, because they do not have the apparatus or the time to do it. The only way is to take an across-the-board spectrum and to return taxes in return for increased investment, which would be a condition of the return of those taxes in the first place. This could bring about a resurgence of the British investment situation, and it is the only way to do it.
If the Government believed their strategy and the language of the Chequers document, they would get on and do it. Until they take such action, which will involve public expenditure cuts to compensate, we shall see British industrial investment jogging along at its present levels, which are now back to about those of the early 1960s. If that is not a basis for the censure of a Government who claimed that they would regenerate British industry, I do not know what is.

6.48 p.m.

The Secretary of State for Industry (Mr. Eric G. Varley): This debate is a live-action replay of the debate last week on a motion which nominally was asking for a reduction in my salary. There has been some good humoured comment about it today, and I make no complaint on that score. For the public, however, our debates should be about subjects a lot more important than one man's pay.
As I have not got very much time before the vote, perhaps I might mention the thoughtful speeches of my hon. Friends the Members for Keighley (Mr. Cryer), Liverpool, Walton (Mr. Heffer), Basildon (Mr. Moonman) and Birmingham, Selly Oak (Mr. Litterick). No doubt I shall come to the speeches of Opposition Members later in what I say.
My hon. Friend the Member for Keighley was right. The Opposition talk constantly about unemployment but regularly vote for unemployment. I shall demonstrate that in a moment.
My hon. Friend the Member for Basildon is very concerned, as we all are, with strengthening management and getting a proper relationship between the Government and industry. That is what we are striving to do, and my hon. Friend's points are well taken.
My hon. Friend the Member for Walton spoke of the serious situation in

his constituency concerning Western Shiprepairers. I can tell him that my hon. Friend the Minister of State will be visiting Merseyside at the weekend to look at the position.
What the debate has demonstrated is that the Tory Opposition are absolutely bankrupt of ideas about what they should do with industry. While the basic political, economic and social arguments are being debated in every home, factory and office in the country, the Tory Opposition decide, in some cases, to reduce the debate to trivial side issues. For them a victory by fluke is worth having. For them it is a question of procedural nit-picking. On the majority of issues no one knows where they stand.
For example, when Parliament debates inflation, where do the Opposition stand? They abstain. When Parliament debates unemployment, the right hon. Member for Lowestoft (Mr. Prior)—I saw him in the House a moment or two ago—tells us that we should do something about it and at the same time calls for instant and massive public expenditure cuts. It is no wonder that the right hon. Member for Worcester (Mr. Walker) gets anxious about this at weekends and makes speeches criticising his own Front Bench. No wonder he is in total despair at the performance of the Opposition Front Bench. However, even the right hon. Gentleman's record is not absolutely clean. When we debate unemployment he, too, plays Jekyll and Hyde.
The Tory Party does not always abstain on unemployment issues. Again and again over the past two years Tory Members have trooped into the Division Lobby to vote in favour of unemployment. They voted in favour of throwing thousands of men out of work. They voted——

Mr. Peyton: I wonder whether the right hon. Gentleman will bear in mind that he is here to talk about his performance.

Mr. Varley: I will, of course, do that—if I do not get many more interruptions. It is pertinent to point out that the Opposition, although they criticise me, have no ideas of their own to put forward. They have consistently voted for putting thousands of workers on the dole. This was so with the Alfred


Herbert workers. The Opposition voted for unemployment for thousands on the Chrysler issue. There were thousands whose livings depended on the continuation of Chrysler. The Opposition voted for unemployment for thousands of British Leyland workers. They voted for more unemployment in Scotland, Oxford and Birmingham, and they even voted for more unemployment in Coventry.
I understand that there is to be a by-election in Coventry within the next few weeks. I hope that when Tory canvassers knock on the doors in Coventry they will ask whether they are addressing workers from British Leyland, Alfred Herbert or Chrysler. If so, they will be facing not abstract statistics but individuals whom the Tory Party has consistently voted to put into the dole queue.
Individuals are not interested in the niceties of parliamentary debates or of procedure. They do not care about the nit-picking that has taken place here. Individuals have the right to know where the Tory Party stands on the job issue. It is an abuse to suggest that we should play this ritualistic game. I do not think that the people outside whom the Tories have voted to throw on the scrap-heap will be impressed by it.
The hon. Member for Henley (Mr. Heseltine) is not shy. He does not hide his light beneath a bushel when it comes to publicity. We are all pleased that he has recovered from the illness which caused his absence from last week's debate. He would have done himself and the House a great service if he had dealt with the issues in a more serious fashion instead of trivialising them. We are supposed to be having a re-run of last week's debate. Instead, however, of talking about the motor car industry, the hon. Gentleman talked about the National Enterprise Board and the transfer of companies to the Board.
For the hon. Gentleman it is always the easy headline. No one can accuse him of being remote. I have a bunch of Conservative Central Office handouts here——

Mr. Ridley: rose——

Mr. Varley: This one, from the hon. Member, says "Release immediate." The next one says:

Mr. Heseltine can be contacted after 8.30 p.m. on Friday. Phone Nettlebed 206.
That is the way he looks at these issues.

Mr. Ridley: rose——

Mr. Varley: It is time that the Tory Opposition stopped playing games.

Mr. Michael Marshall: On a point of order, Mr. Speaker. May I ask for your guidance? Is it in order, after we have sat through the entire debate, for the Secretary of State not once to refer to Government policy?

Mr. Speaker: That is not a point of order. May I appeal to the House? The hon. Member for Henley (Mr. Heseltine) was heard in reasonable silence. I hope that we are shortly to come to a decision.

Mr. Varley: It is about time that the Opposition stopped playing silly games. They know that the whole basis of this debate is bogus. It is time they realised that there are no easy answers to our industrial problems. Instead of trying to put forward constructive suggestions, all that they do is to obstruct the Government and try to prevent us from solving the problems.
Exactly two years ago we were in the middle of an unnecessary General Election campaign brought about by panic decisions taken by the then Conservative Government. Rather than face up to the industrial troubles of the country, they cut and run. They did that 16 months before it was necesseary. In the Department of Industry I am still uncovering some of the skeletons that were left in the cupboard by them.

Mr. Ridley: rose——

Mr. Varley: The hon. Gentleman is the last person to intervene, because some of those skeletons go back to his time when he was concerned with shipbuilding.

Mr. Ridley: rose——

Mr. Varley: I am not giving way. The Opposition ought to stop pretending that the powers they took under the 1972 Industry Act are powers which we cannot use and that they are powers which can be used only by a Conservative Government. The people will rightly lose patience with this House if we do not


debate issues seriously—[Interruption]—instead of the ceaseless nit-picking which the Opposition go in for.
The Opposition are completely barren of ideas for industrial policy. If their vote had been carried in this House the motor car industry would now be in a state of total disintegration, with hundreds of thousands on the scrap-heap. That is

why we should dispose of this motion. There is a routine but worthwhile item to follow on today's Order Paper. We ought to vote on this motion and ensure that the House can proceed to more serious issues.

Question put:—

The House divided: Ayes 296, Noes 280.

Division No. 65.]
AYES
7.0 p.m.


Abse, Leo
Dunnett, Jack
Jones, Dan (Burnley)


Allaun, Frank
Dunwoody, Mrs Gwyneth
Judd, Frank


Anderson, Donald
Eadie, Alex
Kaufman, Gerald


Archer, Peter
Edge, Geoff
Kelley, Richard


Armstrong, Ernest
Edwards, Robert (Wolv SE)
Kerr, Russell


Ashley, Jack
English, Michael
Kilroy-Silk, Robert


Ashton, Joe
Ennals, David
Kinnock, Neil


Atkins, Ronald (Preston N)
Evans, Fred (Caerphilly)
Lambie, David


Atkinson, Norman
Evans, Ioan (Aberdare)
Lamborn, Harry


Bagier, Gordon A. T.
Ewing, Harry (Stirling)
Lamond, James


Barnett, Rt Hon Joel (Heywood)
Faulds, Andrew
Latham, Arthur (Paddington)


Bates, Alf
Fernyhough, Rt Hon E.
Leadbitter, Ted


Bean, R. E.
Fitch, Alan (Wigan)
Lee, John


Bennett, Andrew (Stockport N)
Flannery, Martin
Lestor, Miss Joan (Eton and Slough)


Bidwell, Sydney
Fletcher, Raymond (Ilkeston)
Lever, Rt Hon Harold


Bishop, E. S.
Fletcher, Ted (Darlington)
Lewis, Arthur (Newham N)


Blenkinsop, Arthur
Foot[...], Rt Hon Michael
Lewis, Ron (Carlisle)


Boardman, H.
Ford, Ben
Lipton, Marcus


Booth, Rt Hon Albert
Forrester[...], John
Litterick, Tom


Bottomley, Rt Hon Arthur
Fowler, Gerald (The Wrekin)
Loyden, Eddie


Boyden, James (Bish Auck)
Fraser, John (Lambeth, N'w'd)
Luard, Evan


Bradley, Tom
Freeson, Reginald
Lyon, Alexander (York)


Bray, Dr Jeremy
Garrett, John (Norwich S)
Lyons, Edward (Bradford W)


Brown, Hugh D. (Provan)
Garrett, W. E. (Wallsend)
Mabon, Dr J. Dickson


Brown, Robert C. (Newcastle W)
George, Bruce
McCartney, Hugh


Brown, Ronald (Hackney S)
Gilbert, Dr John
McElhone, Frank


Buchan, Norman
Ginsburg, David
MacFarquhar, Roderick


Butler, Mrs Joyce (Wood Green)
Golding, John
McGuire, Michael (Ince)


Callaghan, Rt Hon J. (Cardiff SE)
Gould, Bryan
Mackenzie, Gregor


Callaghan, Jim (Middleton &amp; P)
Gourlay, Harry
Mackintosh, John P.


Campbell, Ian
Graham, Ted
Maclennan, Robert


Canavan, Dennis
Grant, George (Morpeth)
McMillan, Tom (Glasgow C)


Cant, R. B.
Grant, John (Islington C)
McNamara, Kevin


Carmichael, Neil
Grocott, Bruce
Madden, Max


Carter, Ray
Hamilton, James (Bothwell)
Magee, Bryan


Carter-Jones, Lewis
Hardy, Peter
Mahon, Simon


Cartwright, John
Harper, Joseph
Mallalieu, J. P. W.


Castle, Rt Hon Barbara
Harrison, Walter (Wakefield)
Marks, Kenneth


Clemitson, Ivor
Hart, Rt Hon Judith
Marquand, David


Cocks, Michael (Bristol S)
Hattersley, Rt Hon Roy
Marshall, Dr Edmund (Goole)


Cohen, Stanley
Hatton, Frank
Marshall, Jim (Leicester S)


Coleman, Donald
Hayman, Mrs Helene
Mason, Rt Hon Roy


Colquhoun, Ms Maureen
Healey, Rt Hon Denis
Maynard, Miss Joan


Concannon, J. D.
Heffer, Eric S.
Meacher, Michael


Conlan, Bernard
Hooley, Frank
Mellish, Rt Hon Robert


Cook, Robin F. (Edin C)
Horam, John
Mendelson, John


Corbett, Robin
Howell, Rt Hon Denis
Mikardo, Ian


Cox, Thomas (Tooting)
Hoyle, Doug (Nelson)
Millan, Bruce


Craigen, J. M. (Maryhill)
Huckfield, Les
Miller, Dr M. S. (E Kilbride)


Crawshaw, Richard
Hughes, Rt Hon C. (Anglesey)
Miller, Mrs Millie (Ilford N)


Cronin, John
Hughes, Mark (Durham)
Molloy, William


Crosland, Rt Hon Anthony
Hughes, Robert (Aberdeen N)
Moonman, Eric


Cryer, Bob
Hughes, Roy (Newport)
Morris, Alfred (Wythenshawe)


Cunningham, G. (Islington S)
Hunter, Adam
Morris, Charles R. (Openshawe)


Cunningham, Dr J. (Whiteh)
Irvine, Rt Hon Sir A. (Edge Hill)
Morris, Rt Hon J. (Aberavon)


Dalyell, Tam
Irving, Rt Hon S. (Dartford)
Moyle, Roland


Davidson, Arthur
Jackson, Colin (Brighouse)
Mulley, Rt Hon Frederick


Davies, Bryan (Enfield N)
Jackson, Miss Margaret (Lincoln)
Murray, Rt Hon Ronald King


Davies, Denzil (Llanelli)
Janner, Greville
Newens, Stanley


Davis, Clinton (Hackney C)
Jay, Rt Hon Douglas
Noble, Mike


Deakins, Eric
Jeger, Mrs Lena
Oakes, Gordon


Dean, Joseph (Leeds West)
Jenkins, Hugh (Putney)
Ogden, Eric


Delargy, Hugh
Jenkins, Rt Hon Roy (Stechford)
O'Halloran, Michael


Dell, Rt Hon Edmund
John, Brynmor
O'Malley, Rt Hon Brian


Dempsey, James
Johnson, James (Hull West)
Orbach, Maurice


Dolg, Peter
Johnson, Walter (Derby S)
Orme, Rt Hon Stanley


Douglas-Mann, Bruce
Jones, Alec (Rhondda)
Ovenden, John


Duffy, A. E. P.
Jones, Barry (East Flint)
Owen, Dr David


Dunn, James A.






Padley, Walter
Short, Rt Hon E. (Newcastle C)
Varley, Rt Hon Eric G.


Palmer, Arthur
Short, Mrs Renée (Wolv NE)
Wainwright, Edwin (Dearne V)


Park, George
Silkin, Rt Hon John (Deptford)
Walden, Brian (B'ham, L'dyw'd)


Parker, John
Silkin, Rt Hon S. C. (Dulwich)
Walker, Harold (Doncaster)


Parry, Robert
Sillars, James
Walker, Terry (Kingswood)


Pavitt, Laurie
Silverman, Julius
Ward, Michael


Pendry, Tom
Skinner, Dennis
Watkins, David


Perry, Ernest
Small, William
Watkinson, John


Phipps, Dr Colin
Smith, John (N Lanarkshire)
Weetch, Ken


Prentice, Rt Hon Reg
Snape, Peter
Weitzman, David


Price, C. (Lewisham W)
Spearing, Nigel
Wellbeloved, James


Price, William (Rugby)
Spriggs, Leslie
White, Frank R. (Bury)


Radice, Giles
Stallard, A. W.
White, James (Pollock)


Rees, Rt Hon Merlyn (Leeds S)
Stoddart, David
Whitehead, Phillip


Richardson, Miss Jo
Stonehouse, Rt Hon John
Whitlock, William


Roberts, Albert (Normanton)
Stott, Roger
Willey, Rt Hon Frederick


Roberts, Gwilym(Cannock)
Strang, Gavin
Williams, Alan (Swansea W)


Robertson, John (Paisley)
Strauss, Rt Hon G. R.
Williams, Alan Lee (Hornch'ch)


Roderick, Caerwyn
Summerskill, Hon Dr Shirley
Williams, Rt Hon Shirley (Hertford)


Rodgers, George (Chorley)
Swain, Thomas
Williams, Sir Thomas


Rodgers, William (Stockton)
Taylor, Mrs Ann (Bolton W)
Wilson, Alexander (Hamilton)


Rooker, J. W.
Thomas, Jeffrey (Abertillery)
Wilson, William (Coventry SE)


Roper, John
Thomas, Mike (Newcastle E)
Wise, Mrs Audrey


Rose, Paul B.
Thomas, Ron (Bristol NW)
Woodall, Alec


Ross, Rt Hon W. (Kilmarnock)
Thorne, Stan (Preston South)
Woof, Robert


Rowlands, Ted
Tierney, Sydney
Wrigglesworth, Ian


Sandelson, Neville
Tinn, James
Young, David (Botton E)


Sedgemore, Brian
Tomlinson, John



Selby, Harry
Tomney, Frank
TELLERS FOR THE AYES:


Shaw, Arnold (Ilford South)
Torney, Tom
Mr. J.D. Dormand and


Sheldon, Robert (Ashton-u-Lyne)
Tuck, Raphael
Mr. John Ellis


Shore, Rt Hon Peter
Urwin, T. W.





NOES


Altken, Jonathan
Crouch, David
Hannam, John


Alison, Michael
Crowder, F. P.
Harrison, Col Sir Harwood (Eye)


Amery, Rt Hon Julian
Davies, Rt Hon, J. (Knutsford)
Harvie Anderson, Rt Hon Miss


Arnold, Tom
Dean, Joseph (Leeds West)
Hastings, Stephen


Atkins, Rt Hon H. (Spelthorne)
Dean, Paul (N Somerset)
Havers, Sir Michael


Awdry, Daniel
Dodsworth, Geoffrey
Hawkins, Paul


Bain, Mrs Margaret
Douglas-Hamilton, Lord James
Hayhoe, Barney


Baker, Kenneth
Drayson, Burnaby
Heath, Rt Hon Edward


Banks, Robert
du Cann, Rt Hon Edward
Henderson, Douglas


Beith, A. J.
Durant, Tony
Heseltine, Michael


Bell, Ronald
Eden, Rt Hon Sir John
Hicks, Robert


Bennett, Dr Reginald (Fareham)
Edwards, Nicholas (Pembroke)
Higgins, Terence L.


Benyon, W.
Elliott, Sir William
Holland, Philip


Berry, Hon Anthony
Emery, Peter
Hooson, Emlyn


Biffen, John
Evans, Gwynfor (Carmarthen)
Hordern, Peter


Biggs-Davison, John
Eyre, Reginald
Howe, Rt Hon Sir Geoffrey


Blaker, Peter
Fairbairn, Nicholas
Howell, David (Guildford)


Body, Richard
Fairgrieve. Russell
Howell, Ralph (North Norfolk)


Boscawen, Hon Robert
Farr, John
Howells, Geraint (Cardigan)


Bottomley, Peter
Fell, Anthony
Hunt, John


Bowden, A. (Brighton, Kemptown)
Finsberg, Geoffrey
Hurd, Douglas


Boyson, Dr Rhodes (Brent)
Fisher, Sir Nigel
Hutchison, Michael Clark


Braine, Sir Bernard
Fletcher-Cooke, Charles
Irving, Charles (Cheltenham)


Britian, Leon
Fookes, Miss Janet
James, David


Brocklebank-Fowler, C.
Fowler, Norman (Sutton C'f'd)
Jenkin, Rt Hon P. (Wanst'd &amp; W'df'd)


Brotherton, Michael
Fox, Marcus
Jessel, Toby


Brown, Sir Edward (Bath)
Fraser, Rt Hon H. (Stafford &amp; St)
Johnson Smith, G. (E Grinstead)


Bryan, Sir Paul
Freud, Clement
Johnston, Russell (Inverness)


Buchanan-Smith, Alick
Fry, Peter
Jones, Arthur (Daventry)


Buck, Antony
Galbraith, Hon T. G. D.
Jopling, Michael


Budgen, Nick
Gardiner, George (Reigate)
Joseph, Rt Hon Sir Keith


Bulmer, Esmond
Gardner, Edward (S Fylde)
Kaberry, Sir Donald


Burden, F. A.
Gilmour, Rt Hon Ian (Chesham)
Kershaw, Anthony


Butler, Adam (Bosworth)
Gilmour, Sir John (East Fife)
Kilfedder, James


Carlisle, Mark
Glyn, Dr Alan
Kimball, Marcus


Chalker, Mrs Lynda
Goodhart, Philip
King, Evelyn (South Dorset)


Channon, Paul
Goodhew, Victor
King, Tom (Bridgwater)


Churchill, W. S.
Goodlad. Alastair
Kirk, Sir Peter


Clark, Alan (Plymouth, Sutton)
Gorst, John
Kitson, Sir Timothy


Clark, William (Croydon S)
Gow, Ian (Eastbourne)
Knight, Mrs Jill


Clegg, Walter
Gower, Sir Raymond (Barry)
Knox, David


Cockcroft, John
Grant, Anthony (Harrow C)
Lamont, Norman


Cooke, Robert (Bristol W)
Gray, Hamish
Lane, David


Cope, John
Griffiths, Eldon
Langford-Holt, Sir John


Cordle, John H.
Grimond, Rt Hon J.
Latham, Michael (Melton)


Cormack, Patrick
Grist, Ian
Lawrence, Ivan


Corrie, John
Grylls, Michael
Lawson, Nigel


Costain, A. P.
Hall-Davis, A. G. F.
Lester, Jim (Beeston)


Crawford, Douglas
Hamilton, Michael (Salisbury)
Lewis, Kenneth (Rutland)


Critchley, Julian
Hampson, Dr Keith
Lloyd, Ian







Loveridge, John
Pattie, Geoffrey
Stanbrook, Ivor


Luce, Richard
Penhaligon, David
Stanley, John


McAdden, Sir Stephen
Percival, Ian
Steen, Anthony (Wavertree)


MacCormick, Iain
Peyton, Rt Hon John
Stewart, Donald (Western Isles)


McCrindle, Robert
Pink, R. Bonner
Stewart, Ian (Hitchin)


Macfarlane, Neil
Price, David (Eastleigh)
Stokes, John


MacGregor, John
Prior, Rt Hon James
Stradling Thomas, J.


Macmillan, Rt Hon M. (Farnham)
Pym, Rt Hon Francis
Tapsell, Peter


McNair-Wilson, M. (Newbury)
Raison, Timothy
Taylor, R. (Croydon NW)


McNair-Wilson, P. (New Forest)
Rathbone, Tim
Taylor, Teddy (Cathcart)


Madel, David
Rawlinson, Rt Hon Sir Peter
Tebbit, Norman


Marshall, Michael (Arundel)
Rees, Peter (Dover &amp; Deal)
Temple-Morris, Peter


Marten, Neil
Rees-Davies, W. R.
Thatcher, Rt Hon Margaret


Mates, Michael
Renton, Rt Hon Sir D. (Hunts)
Thomas, Rt Hon P. (Hendon S)


Mather, Carol
Renton, Tim (Mid-Sussex)
Thompson, George


Maude, Angus
Ridley, Hon Nicholas
Thorpe, Rt Hon Jeremy (N Devon)


Maudling, Rt Hon Reginald
Ridsdale, Julian
Townsend, Cyril D


Mawby, Ray
Rifkind, Malcolm
Trotter, Neville


Maxwell-Hyslop, Robin
Rippon, Rt Hon Geoffrey
Tugendhat, Christopher


Mayhew, Patrick
Roberts, Michael (Cardiff NW)
van Straubenzee, W. R.


Meyer, Sir Anthony
Roberts, Wyn (Conway)
Vaughan, Dr Gerard


Miller, Hal (Bromsgrove)
Rodgers, Sir John (Sevenoaks)
Viggers, Peter


Mills, Peter
Ross, Stephen (Isle of Wight)
Wainwright, Richard (Colne V)


Miscampbell, Norman
Rossi, Hugh (Hornsey)
Wakeham, John


Mitchell, Davild (Basingstoke)
Rost, Peter (SE Derbyshire)
Welder, David (Clitheroe)


Moate, Roger
Royle, Sir, Anthony
Walker, Rt Hon P. (Worcester)


Monro, Hector
Sainsbury, Tim
Wall, Patrick


Montgomery, Fergus
St. John-Stevas, Norman
Walters, Dennis


Moore, John (Croydon C)
Scott, Nicholas
Warren, Kenneth


More, Jasper (Ludlow)
Shaw, Giles (Pudsey)
Watt, Hamish


Morgan, Geraint
Shaw, Michael (Scarborough)
Weatherill, Bernard


Morris, Michael (Northampton S)
Shelton, William (Streatham)
Wells, John


Morrison, Charles (Devizes)
Shepherd, Colin
Welsh, Andrew


Morrison, Hon Peter (Chester)
Shersby, Michael
Whitelaw, Rt Hon William


Mudd, David
Silvester, Fred
Wiggin, Jerry


Neave, Airey
Sims, Roger
Wigley, Dafydd


Nelson, Anthony
Sinclair, Sir George
Wilson, Gordon (Dundee E)


Neubert, Michael
Skeet, T. H. H.
Winterton, Nicholas


Newton, Tony
Smith, Cyril (Rochdale)
Wood, Rt Hon Richard


Nott, John
Smith, Dudley (Warwick)
Young, Sir G. (Ealing, Acton)


Onslow, Cranley
Speed, Keith
Younger, Hon George


Oppenheim, Mrs Sally
Spence, John



Page, John (Harrow W)
Spicer, Michael (S Worcester)
TELLERS FOR THE NOES:


Page, Rt Hon R. Graham (Crosby)
Sproat, Iain
Mr. Cecil Perkinson and


Pardoe, John
Stainton, Keith
Mr. Spencer Le Marchant

Question accordingly agreed to.

Resolved,

That this House, notwithstanding the opinion expressed on 11th February in the Motion relating to the salary of the Secretary of State for Industry, affirms that the provisions of the relevant Statutes shall continue to apply.

Orders of the Day — TRUSTEE SAVINGS BANKS BILL [Lords]

Order for Second Reading read.

7.15 p.m.

The Paymaster-General (Mr. Edmund Dell): I beg to move, That the Bill be now read a Second time.
The Bill arises out of the major recommendation of the Page Committee on National Savings. I suppose that few committees established by the Government have had so many of their recommendations accepted. I am particularly glad today to be moving the Second Reading of a Bill which creates the statutory framework within which the Trustee Savings Banks will be able to provide a much wider range of banking services to their 10 million or more depositors, mainly in the lower income groups.
The Trustee Savings Banks are, of course, a long-standing feature of our financial scene. They are independent bodies formed—in some cases over 150 years ago—on the initiative of groups of local citizens with the objective of providing simple savings facilities for the public. Typically enough, the origin of the movement was in Scotland, and no doubt it was a proper sense of values and perspective which led the editor of the Edinburgh Review to write editorially just after the Battle of Waterloo:
After the great glory of the recent military victory has passed away, and after the impact of the new commercial strength of the country may perhaps have receded, it will yet appear that the Savings Banks will bring more happiness to the people of Britain.
I owe that quotation to the Chairman of the Scottish Committee of the National Savings Movement, Lord Elgin.
Since those early days the banks have developed their activities significantly under the independent local direction of trustees. Although closely associated with Government savings arrangements, the banks' prime purpose has remained the provision of basic banking services to the public in their local communities. With the growth of their branch network—there are now over 1,500 branch offices—and the increase in the funds they now manage, the legislation under which they

operate has been found to be no longer apt.
The previous Government, therefore, appointed the Page Committee on National Savings which reported in 1973. The Committee recommended radical changes in the banks' organisation, in the services which they offered and in their relationship with the Government. It made four interlocking proposals. First, the Committee believed that the Trustee Savings Banks should be entitled to operate full banking functions, including the making of loans to depositors. However, these were to be facilities for the ordinary public rather than for corporate bodies.
Secondly, the Committee recommended that the Trustee Savings Banks should have more freedom from direct Government control of a detailed nature. It was accepted that this new independence would have to be granted gradually over a transitional period. As a corollary, the organisation of the banks would need to be strengthened internally, and as part of this process the third policy objective would be the reduction of the number of separate banks, so that stronger units based on regions rather than large towns could emerge.
Lastly, to replace external Government control and to provide a co-ordinating mechanism, the Page Committee suggested that a strong central authority should be established mainly from within the movement.
No doubt those recommendations were being considered by the Government of the right hon. Member for Sidcup (Mr. Heath) before they went out of office. Immediately we came into office we began consultations and found that the Page Committee's recommendations were generally welcomed by the banks' own representative organisation and by the representatives of the staff. Of course, the prime consideration in the minds of the Government was the desirability for providing the millions of depositors with the Trustee Savings Banks with comprehensive banking services. On 31st July 1974, in reply to my hon. Friend the Member for Leigh (Mr. Boardman), I was able to announce the Government's acceptance of the recommendations of the Page Committee on the Trustee Savings Banks and our agreement that they should be


empowered to develop along the lines recommended in the Report.
The programme for implementing the objectives of the Report have been discussed with the Trustee Savings Banks Association. The programme falls into three stages. The first is already in operation. It will run until the end of the banks' current financial year, on 20th November 1976. It has been essentially a time of preparation, laying the foundation for the future. It has involved major structural changes, brought about through the reduction, by amalgamation, of over 70 Trustee Savings Banks to the present figure of 17 which by reason of their size will qualify for representation on the Central Board. The nucleus of the staff required for the new central controlling and banking organization—the Trustee Savings Banks Central Board—is being recruited. The banks are gearing themselves to provide the new services which, if the House approves this measure, will come into effect at the beginning of the banks' next financial year.
In the second stage, which will run for three years from November 1976, there will be major changes in the form of Government control over the Trustee Savings Banks. A start will also be made on forging a new relationship between the banks and the monetary authorities, a relationship which will eventually develop into a form much more like that applied to the clearing banks. Depositors will begin to see an important extension in the services offered, notably the availability of personal loans. The basic ordinary savings account, whose funds are largely invested with the Government and to that extent guaranteed, will continue in its present form for three more years, as will the tax relief allowed on the first £40 of interest. At the end of those three years the ordinary accounts will become a form of savings account offering terms which the Central Board and the banks consider appropriate.
During the final stage of the transformation period, which the Government expect will last for about seven years until November 1986, the funds placed by the banks with the Government for reinvestment will be gradually handed back. The Treasury will continue to keep an eye on the banks' operations and development, particularly on the rate at which the banks build up their own reserves.
The building up of the banks' reserves is, of course, a crucial element in the transition, which, indeed, cannot be brought to an end before an adequate level of reserves has been achieved. The progress of each regional bank towards an adequate reserve position will be monitored closely by the Central Board through a system of financial projections and regular performance reports. Each regional bank will be working towards financial targets prepared on a rolling three-year basis and approved by the Central Board. Closer scrutiny will be applied to any regional bank which appears likely to fall significantly short of its target. The Treasury will also monitor progress on reserves.
I should make it clear, however, that the Government do not envisage the introduction of any new fiscal aids for the Trustee Savings Banks. It is the intention that the Trustee Savings Banks should compete on equal terms with the commercial banks and other financial institutions. In due course the Trustee Savings Banks will become subject to the same regulations and controls as their competitors. The transitional period will not be extended any longer than is absolutely necessary.
The achievement of the objectives of the Page Report thus involves a considerable increase in reserves and changes in structure, management and relationship with the Government which are dependent on the legislation now brought before the House.
The Bill launches the Trustee Savings Banks on what we may call, in tribute to Sir Harry Page, the Page path—that is the establishment of the Trustee Savings Banks as a third force in banking, a third force which is mutually owned. I gave an assurance in my statement of 31st July 1974 that during the transitional period the Government would retain sufficient powers of control and intervention in order to protect depositors. This is assured by the Bill. The transitional phase will take place under the benevolent surveillance of the Government, but of a Government willing to withdraw from controls greater than those generally applied to the banking system as the Trustee Savings Banks are increasingly able to stand on their own feet.
I do not believe that the House will wish me to go clause by clause through


the Bill, which came to us from another place, but there are a number of points to which I should draw attention. It is largely an amending and enabling Bill which builds on the existing Trustee Savings Banks Act 1969. The early clauses of the Bill deal with the structure and powers of the Central Board. Perhaps the key clause in the Bill is the short Clause 9, which empowers each Trustee Savings Bank to carry on the business of banking. It is this clause which enables the banks to extend their services, including the granting of credit. The banks will, of course, be subject to quantitive controls by the Treasury on the level of investment and loans.
Although the Bill does not limit the power of Trustee Savings Banks to conduct and develop their functions, it is not the intention that they should make loans to the corporate sector. The banks expect from the beginning of their next financial year to develop both their deposit services and their credit services. Their deposit services will include cheque accounts, savings accounts, investment accounts and fixed-term bonds.
The banks' cheque accounts have been expanding dramatically in recent years and they now total well over 700,000 Although this may appear low in relation to the total number of ordinary department savings accounts, it is expected that cheque accounts will continue to increase dramatically. As a consequence, a much wider sector of the community than in the past will be taking advantage of cheque book facilities.
The credit services will include overdraft facilities and a personal loan scheme, but in the short term these facilities are not expected to be significant compared with the total cash balances held by the Trustee Savings Banks. The Trustee Savings Banks will conform with any monetary policy guidance on overdrafts. As for the Personal loans scheme, at the outset loans under the scheme will be within the range of £150 to £1,500 and will be repayable in accordance with current regulations governing personal loan agreements.
I have emphasised the importance of the banks building up their reserves at the same time as they develop their banking services for depositors. An essential element is the removal of the present

constraints on the investment of deposits. Clause 12 removes the present requirement on the banks to invest their current account deposits with the National Debt Commissioners. Together with Clause 16, it unravels the present financial links between the banks and the Commissioners.
Clause 13 and Schedule 3 enable the Treasury to determine the amount and proportion of the banks' funds which each Trustee Savings Bank may invest in a specified range of assets and in particular the overall liquidity position of each bank. This new and more flexible control will replace the existing more detailed control at present exercised by the Commissioners. It will nevertheless enable the Government to protect the interests of depositors by watching the way their funds are managed. It will also ensure that the Trustee Savings Banks retain substantial holdings of public sector debt.
Under Clause 16, the repayment of the ordinary funds invested with the Commissioners will take place. At the beginning of their next financial year, the total sum which will be outstanding to the credit of the banks, excluding current account and other moneys, is estimated at £1,500 million. It is this sum that the Government will be obliged to repay. Movements of sums of this size across the market could be disruptive. Accordingly, there is an agreed scheme to repay by instalments. Eventually the banks will receive the whole of their investment back pound for pound. The underlying securities at present show a deficiency of some £200 million because of a decline in market values over the long period during which the fund has operated. To give the authorities time to reduce and eliminate that deficiency, the banks have agreed that this repayment should be phased over the expected seven years of the transition following the phasing out of the ordinary department.
It may be appropriate here to consider the changes which will occur in the bank's taxation position. The tax relief on the interest paid to depositors in the ordinary department accounts will end when those accounts are phased out in November 1979. The tax position of the banks themselves is rather more complicated, because of the separation of the ordinary and Government side of


their business from their own special investment accounts.
Under existing law, income from ordinary deposits held in the Fund for the Banks for Savings which is managed by the National Debt Commisioners is exempt from tax, so that the ordinary accounts system in practice is free of tax. On the other hand, the special investment department pays corporation tax on the surplus of its income after paying interest and expenses. A later Finance Bill will provide for the ending of tax relief for depositors in the ordinary department, and that income from the Fund for the Banks for Savings will continue to be exempt from corporation tax but the expenses and interest relative to that income will not be available for offset against other income. As the fund is gradually repaid, therefore, the banks will move progressively to the same taxation regime as that which applies to similar financial bodies.
Part III of the Bill deals with various miscellaneous provisions. Clause 24 provides for transferring certain functions from the Commissioners to the Registrar of Friendly Societies and enables the Registrar to regulate, if necessary, the advertising of Trustee Savings Banks. These clauses are required because the Trustee Savings Banks are not at present covered by the Protection of Depositors Act, but it is thought that in their new expanded rôle there should be provision for controlling advertising on similar lines to that applicable to analagous bodies, notably the building societies.
An important element in the future arrangements is that dealing with superannuation of staff. This is the question dealt with in Clauses 30 and 31. It was, of course, necessary to ensure that the staff representatives had a full opportunity for consultation in relation to this matter. The banks have always closely followed the terms offered by public sector bodies. Indeed, their representatives have consistently asked for parity. In future, the Trustee Savings Banks will run their own superannuation schemes. As is the convention in these matters, however, it is appropriate to make full provision for protecting the rights of existing employee and for ensuring that the banks' management has the appropriate powers to bring in new terms which are acceptable to the staff.
We have been assured by the trade union representing the staff of the Trustee Savings Banks that it is completely satisfied with the provisions of the Bill in relation to superannuation. I am pleased to say that the management has given satisfactory assurances, in agreement with the union, which have been conveyed to the staff, about the future of their pensions.
One element in the move to greater independence of the Government is signified by Clause 32, which provides for the dissolution of the Inspection Committee and the preservation of pensions for its staff. The Inspection Committee has an honourable history of some 80 years, and I would like to pay tribute to the members of the Committee and to its staff for the excellent services they have given over the years. The Inspection Committee's main functions will be transferred to the Central Board and appropriate inspection arrangements will be set up.
This short Bill is of great importance to the 10 million or more depositors who have come to rely on the banks for the safe custody of their savings and for the provision of banking services. The Bill gives the banks greater independence and the opportunity to develop services for the benefit of their depositors. It maintains all the essential features of the Trustee Savings Bank movement, particularly the links with their localities. But it couples this with a national approach on policy matters which is important if the Trustee Savings Banks are in fact to develop as a third banking force.
I ask the House to give the Bill a Second Reading.

7.34 p.m.

Sir John Rodgers: I am sure the House will be grateful to the right hon. Gentleman for the clarity with which, without going into the Bill clause by clause, he has explained the new powers conferred on the Trustee Savings Banks and all the transitional arrangements which will be made before those powers are fully operative. All who listened to the Minister will agree that this is a useful and important Bill. It is also an unusual Bill. It is unusual first because it is one of those Bills which, in political terms, is completely uncontroversial. I am sure that it will commend itself to all parties in the House. Indeed, it should commend itself to all sections.
I start by declaring my interest. For several years I have been a member of the Trustees Savings Banks Parliamentary Committee. In the past two or three years I have been chairman of that committee. The committee, like all similar bodies, represents all parties and both Houses. I make clear that I derive no pecuniary benefit whatever from my chairmanship of this body, but many benefits from serving and meeting the staff of the Trustee Savings Banks.
The second way in which the Bill is unusual is that although it sets up the Trustee Savings Banks Central Board, it does not extend, as most other Bills do, the Government's power. In effect, it is an instrument for the diminution of the Government's power and gives the Trustee Savings Banks, as the Minister has pointed out, a greater measure of self-government and extended facilities to their depositors. In effect the Bill will out the umbilical cord which for many years has attached the Trustee Savings Banks to the National Debt Office. It will give the banks greater responsibility for their own affairs and great opportunities, I hope, for expansion.
The Bill is unusual in one other respect. Over the years Governments have presented Bills dealing with industries or financial institutions when those bodies have been in financial difficulties. The Bills have been the Government's way to deal with that situation. We have been accustomed to the Government announcing their plans in order to correct various situations, such as Chrysler and British Leyland in recent times. This is not a Chrysler or British Leyland situation. The Trustee Savings Bank is a flourishing bank. It is not asking the taxpayer to come to its assistance in any way whatever. I think that the House will agree that that is unusual. It is also most gratifying.
As the Minister said when presenting the Bill, it follows the findings of the Page Committee's Report. That Committee recognised the great services rendered to the community by the Trustee Savings Bank movement.
I should like to present a few facts. It is interesting to note that one out of every five people in Great Britain has an account with a Trustee Savings Bank. That accounts for the fact that 34 per

cent. Of all national savings are through the Trustee Savings Bank. The deposits in those banks are real cash deposits. They are the result of thrift and hard work by the depositors. The Trustee Savings Banks have encouraged saving by the ordinary people, and what a success story have they had ever since their inception 160 years ago when the first bank was established in Dumfrieshire. I shall come back to the Dumfrieshire bank in a moment.
Last year was the best year ever for the Trustee Savings Banks, with an overall increase of 10½ per cent. The funds for 1975 totalled £4,462 million compared with just over £4,000 million the year before. Good though these figures are, we must not be misled by them. Compared with the savings accounts of Trustee Savings Banks in Western European countries, we are the lowest but one. The only country lower than us is Ireland, which has 70 savings accounts per 1,000 population. The United Kingdom has 254 savings accounts per 1,000 population. However, we must contrast that with Germany, which has 915 accounts, and Norway, which has 1,000 accounts per 1,000 population. Although the United Kingdom figure seem low by comparison with European countries, this is attributable to the lack of building society competition and to the relatively higher penetration of commercial banks in the area of wage and salary earnings in the United Kingdom.
Although, as the Minister pointed out, the Trustee Savings Banks will be reduced not to one monolithic institution like the clearing banks, but from 70 Trustee Savings Banks of various sizes to 17 regional banks, these institutions will still provide local advice on monetary matters and protect the relatively inexperienced people in their localities by helping them to put their savings week by week into safer hands.
It should be remembered that half the population of the country does not yet have a banking account and that the new powers and the wider freedom to offer even more services than before under the Bill will enable the banks to play an ever-developing rôle in the financial life of the country. At this stage, after 160 years of the Trustee Savings Banks, we should express our gratitude to the trustees and staff who have built up this amazingly


successful institution, which is now part and parcel of our financial life. I hope that the new set-up will find many dedicated and devoted people to look after its work.
Will the Minister tell us what the future holds for those banks which are in essence uncertified banks doing a similar job to the TSB, but not belonging to the Trustee Savings Bank Association? Five banks at Greenock, Airdrie, Annan, Dumfries and Lockerbie are not attached. I am told that the Greenock bank may go with the Glasgow branch and that possibly Dumfries will join Edinburgh. But are there any powers in the Bill to affect these banks? Will their ability to invest and lend against hereditable property be affected, for example? Would they lose anything by coming into the TSB movement, and if not will the Minister use his good offices to try to persuade them to join it?
Once again I thank the Minister for the way in which he has introduced this important and useful Bill.

7.43 p.m.

Mr. R. B. Cant: Having an interest as I do in banking and financial matters, I must give a general welcome to the Bill and congratulate the Paymaster-General on the brevity and clarity with which he presented it. The purpose of my contribution tonight is to bring to my right hon. Friend's attention some of the misgivings of the North Staffordshire Trustee Savings Bank, the headquarters of which are in my constituency.
I do not make this as a naked constituency point, because I am sure that the situation applies elsewhere. I am sure also that the misgivings of the North Staffordshire bank stem to a very large extent from the fact that this is the most successful Trustee Savings Bank in the country. Deposits of £44 million increased in the last year by £7 million, and that rate of growth was twice the national average. The profit ratio is the highest in the country and the management expenses, at £1·26 per £100 of deposits, are the lowest.
The North Staffordshire Trustee Savings Bank is quite prepared to accept the challenge implicit in the Bill. It is quite prepared to undertake an extension

of the services in the area, for example, of personal loans. Characteristically, on a basis of pragmatism, it will start off in a small way and will extend the service as it is called for. I would like to make two points, however, and these should be taken into account by my right hon Friend.
It would be much happier about the future if it were allowed to keep the whole of its profits. It seems a strange situation in which this highly successful bank is compelled to pass on half of its £350,000 profit to help, not the lame ducks of the movement, but those who are experiencing difficulties because of either poor management or the environment in which they are operating.
The second item that it would throw out as a challenge to the Minister is that it would feel much happier if it were permitted a more flexible policy on the rate of interest. I see no reason why that should not happen. It believes that throughout its history it has played an important part in mobilising savings in the North Staffordshire area. There are about 140,000 accounts and about 450,000 people, a ratio well above the average. There is, however, an average of only about £250 per deposit.
I have made these comments in a subdued key and I now wish to come to the aspect of the Bill which arouses the trustees and the depositors of the bank to some considerable opposition to the proposals for amalgamation. I feel that the suggested amalgamation of North Staffordshire with Nottingham and Leicestershire is rivalled only in its stupidity by the decision to join Uttoxeter and Stafford in some sort of holy union with Wales. The proposals for North Staffordshire are nothing more than a sick joke for which it is difficult to find a charitable explanation. The suggested amalgamation is a complete denial of the facts of geography, an attempt to join areas with populations of completely diverse social characteristics. As an economist I might add that it is a travesty of the elementary principles of business organisation.
What is more serious is the pressure to which the North Staffordshire TSB is being exposed. One can understand the seductive overtures by Nottingham and Leicester, embracing the offer of perhaps a little local autonomy if North


Staffordshire will put up only a token resistance to the amalgamation. But the innuendoes of the officers of the Trustee Savings Bank Association, coupled with overt hints about what might happen if resistance to this amalgamation is carried on once the Bill becomes law, are less acceptable.
I can understand that North Staffordshire is a small jewel which the new bureaucrats are anxious to include in their amalgamated crown. However, I hope that my right hon. Friend will make it clear to the association that the North Staffordshire bank is not prepared to carry on negotiations under this sort of duress. Being a diplomat by nature, I suggest that a way out can be found. The Page Report suggested that the amalgamations might produce between 16 and 20 new units. Even with an independent North Staffordshire Savings Bank, the number would total only 18.
The whole of our post-war history is strewn with failures that have occurred because we have had so many grand theories that have not worked out in practice. I shuddered when I read what some publications had to say about this Bill. The Banker said:
TSBs flex their muscles".
The Financial Times referred to:
A major new force in consumer banking".
The marvellously conservative Daily Telegraph said:
Plan for the Trustee Savings Banks heralds third force in banking".
Even on Second Reading in another place one noble Lord said the Bill heralded a new era and another said it would cast aside the anachronism of a bygone age. These phrases frighten me.
The Paymaster-General talked about setting up institutions to introduce a comprehensive banking service and of recruiting bureaucracies. We should bear in mind our experience with other bureaucracies that have been recruited. I do not wish to refer to the computer centre in Swansea or even to the growth of the bureaucracy in the National Health Service, the water authorities and Giro. Those people with little native caution about the glowing prospects of these new institutions which have been superimposed on extremely viable and profitable units

should be tolerant if some of those units protest just a little.
The area in which the North Staffordshire Trustee Savings Bank is situated is one with a low profile. It is essentially a working-class area with workers who spend their time handling many of the primitive things of life, such as steel, clay and coal. There is a peripheral engineering industry. They are honest working people who do not even have the apparently fashionable desire to go on strike. They regard the bank in their community as something which renders them a service.
I do not necessarily subscribe to the philosophy that small is beautiful, but many big things can be very ugly. I plead with the Paymaster-General to ensure that this one bank survives. If it does, it will undoubtedly continue to serve the people of North Staffordshire and will also be a very useful yardstick for the Paymaster-General to judge the progress of the rest of the new banking system.

7.53 p.m.

Mr. Hugh Fraser: I should like to congratulate the Paymaster-General on his extremely clear exposition of the Bill and to congratulate the hon. Member for Stoke-on-Trent, Central (Mr. Cant) for his brilliant constituency speech. I agree with every word of it. This bank has every reason to be allowed to survive.
The idea of a national bank being formed from the various Trustee Savings Banks was rejected. It was rightly decided that the new banking system should be based on regions. However, if the Minister consults the new authorities, he will find good reason for saying that there are exceptions which should be allowed to survive for the reasons given by the hon. Member for Stoke-on-Trent, Central.
One should not put what is being achieved too highly. It will take the system several years to settle down and to work out its relationship with nearly 10 million depositors. The Government have not taken the view that these institutions should be called mutual banks. They are to be congratulated on retaining the title Trustee Savings Banks. However, we must recognise that the new system should not only go slowly overall, but should go very slowly indeed in the initial stages.
There are branches of the North Staffordshire Trustee Savings Bank in my constituency and friends in the bank have suggested that one reason for the present low rate of management expenses per £100 of deposits may be the fairly simple services being provided for the hard-working, but not very rich, members of society who use the bank's facilities.
The fact that this is a mutual movement which is now being expanded raises the problem of how to run a banking exercise without capital or sufficient reserves. On the deposits of £4,000 million, even after the National Debt Commissioners have repaid the £50 million they have clawed back in the past 20 years, and adding the banks' own available reserves, there will be initial reserves for this very large savings movement of only about £70 million if it is to indulge in all the facilities provided by clearing banks.
I am not suggesting that we shall have the sort of banking investigation that is rocking the United States because of the inability of the largest banks to back their lendings with sufficient reserves, but this is a serious point which must be borne in mind by the Government. When these banks break free from Government control, they will need infinitely greater resources than the £70 million at present envisaged. There is about £250 million outstanding from the Government to these banks because of the fall in Government securities, but this will taken seven years to repay. There is also the question of tax advantages which accrue to depositors. I am not sure whether the Government have gone quite far enough in saying they should not be extended beyond 1979. It is questionable whether they could go a bit further.
The main point is that one must hasten slowly and where possible retain local loyalties and the special considerations which accrue to areas and not create under Clause 4 a too-powerful body that will try to force recalcitrant members who give excellent services to local depositors into a system which could be to the detriment of the depositors.

8.0 p.m.

Mr. Ian Wrigglesworth: I give a general welcome to the rôle of the Trustee Savings Banks which the Bill provides, although I have reservations

about some of the details. The House will recognise the substantial changes which have taken place in the banking sphere in recent years, particularly the changes in the Trustee Savings Banks as a result of the recommendations of the Page Committee. As well as launching the foundations for the new work which will be carried out under the Bill, the reforming into 17 regional banks is a welcome and overdue reform which already should have brought considerable benefits to the customers of the banks. Like my hon. Friend the Member for Stoke-on-Trent, Central (Mr. Cant), I am not a great believer in small being beautiful.
Although the reforms in the Bill arise directly out of the Page Committee's recommendations, they cannot be viewed in isolation from the tremendous changes which have taken place over the last few years in the banking world, the speed of which has not diminished in the recent past. The changes which have taken place and are taking place have gathered a momentum of their own which it may well have been wise for the Government to restrain while they took a long, hard look at the way the banking industry was going.
The developments in the Trustee Savings Bank movement have been described as the development of a third force in banking. I and many of my hon. Friends would have welcomed a much more co-ordinated development of public sector banking. The Committee stage of the Post Office (Banking Services) Bill has just finished. Its passage has been notable for having taken place in almost total isolation, without consideration being given to the rôle of the National Giro whose services it seeks to extend in relation to other sections of banking in either the public or the private sector or to various bodies responsible for the supervision of the banking system.
I should like the Government to have followed a coherent policy for the development of the various institutions which currently exist in public sector banking, including the Paymaster-General's Office, the National Savings Bank, the Trustee Savings Banks and the National Giro. I suspect that one reason why that has not happened is that so many Government Departments are responsible for different aspects of banking. I shall return to that later when I


look at who is to supervise the individual Trustee Savings Banks and the Trustee Savings Bank Central Board outlined in the Bill.
As a result of the reorganisation which has already occurred and the new responsibilities which will be undertaken with the passing of the Bill, the Trustee Savings Banks, their management and their staff have been pitchforked out of a relatively peaceful rôle as a straightforward savings bank movement with simple cheque account facilities into a much more abrasive, competitive and inevitably risky world. Their customers have been able to rest easy because they had formidable Government guarantees to back their deposits, and there has been the strictest supervision by the Inspection Committee and the National Debt Commissioners.
As the noble—and Co-operative—Lord, Lord Jacques, said in another place, the banks
have to prepare their staffs, their customers, and the equipment for the lending facilities which will come in the following stage and for which they have comparatively little experience."—[Official Report, House of Lords, 9th December 1975; Vol. 366, c. 844.]
Without reflecting in any way upon the ability or integrity of the staff and everyone involved in the trustee movement, the House needs to be assured that the extension of service into new areas will not be too rapid, that the staff will be adequately trained and capable of carrying it out and that there will be adequate supervision of the new activities by appropriate authorities.
To some extent these assurances have been given by the Paymaster-General today, but Clause 9 outlining the powers of the banks, is drawn very widely. Mr. Philip Keens, the Chairman of the South-East Trustee Savings Bank, forecast last November that the banks would eventually lend to corporate as well as private customers. Mr. Catt, the then General Manager of the Trustee Savings Bank, interviewed in October 1974 by the Trustee Savings Bank Gazette, said:
We do envisage in the near future setting up a gilt-edged advisory and investment service which we hope to be able to operate for the benefit of the Trustee Savings Bank movement as a whole.

He added:
we recognise that there are probably a number of other fields, such as personal credit and foreign exchange, which we will need to look at in the fairly near future.
I have no desire to restrict these developments, but they represent a substantial change in the type of work being done by the banks and the House needs to be reassured that the banks and their staff are adequately equipped to carry it out. We also need to know exactly what new ventures they intend to embark upon, as the Lord Jacques flatly contradicted Mr. Keens when he said in the other place:
I should say that it is not intended to permit the banks to give credit in the corporate sector—[Official Report, House of Lords, 9th December 1975; Vol. 366, c. 845.]
I should be grateful if my hon. Friend the Minister would clarify that point.
The House should pay particular attention to the report of the Inspection Committee of Trustee Savings Banks for the year ended 20th November 1974, which was published last July and in which the following comments were made:
Two cases notified in 1973 and reported upon in the current year involving many thousands of pounds revealed grave weaknesses in the administrations of the banks concerned… During the year many cashiers have inadvisedly permitted cash withdrawals against uncleared cheques involving some banks in heavy losses…these cases indicated that there had been some lack of supervision and ignorance of the basic elements of savings banking.
In the 1973 report one finds the following comments:
The number and amount of salad cash errors continued to grow and this trend is causing anxiety to management of certain banks…in a few cases, chiefly in relation to the purchase of motor cars and entertainment, it"—
that is, the Inspection Committee—
was obliged to take exception to certain items which were considered excessive or unnecessary. The continued growth of management expenses cannot but be a matter of concern both to the banks and to the Committee.
As a result of those findings, the Inspection Committee went on to draw the following conclusions about the recommendations made by the Page Committee:
It is felt that an independent Inspectorate is essential if the confidence of depositors is to be maintained, and that the Inspectorate should be required to publish annual reports.


The Committee went on to point out that its rôole had been:
to ensure that management adopts standards which can be regarded as reasonable and acceptable to public opinion.
The Committee went on to make the following recommendations for the future:
the reason the Committee considers that the Inspectorate of the future needs to be independent is that experience has shown that management is not infrequently extravagant in its ideas on certain matters, that controls are often not maintained since 'familiarity breeds contempt', and that owing to fears of adverse publicity and criticism there is a wish to hide facts and not to take action.
The House will agree that these are serious observations and recommendations made by a Committee of the highest standing. Its views need to be weighed carefully by hon. Members in relation to the Bill and to the new powers which it gives to Trustee Savings Banks. I hope that the Minister will reassure the House on these points.
It is proposed under the Bill that no longer will all the funds of the banks be invested in Government stock. I should be grateful if my hon. Friend could spell out tonight exactly what that will mean for the Exchequer and for customers of the banks.
It may be that the interest which the National Debt Commissioners have paid to the banks, plus the tax relief which the Government have allowed customers on their interest, adds up to the same sum as the Government will have to pay to seek the deposits elsewhere, assuming that they will have to seek such deposits. On the other hand, depositors will need reassuring that they will get a reasonable rate of return on their deposits with the banks. In this connection it would be helpful if the Minister could make clear when he anticipates that the Government's guarantees for depositors will be removed.
In addition, I believe that under the competition and credit control rules, the deposits of the Trustee Savings Banks were protected against excessively high interest rates of competitors. I should like to know whether this rule will remain in operation with the new status of the Trustee Savings Banks.
I notice that the £250 million deficit on the Fund for the Banks for Savings

will, it is hoped, be recouped over the next seven years. Clearly there is an obligation upon the Government to ensure that the full amount is recouped. In the unlikely event of that not happening, will the Government make good any shortfall?
One of my strongest objections to the Bill is that it adds further to the panoply of banking supervisory agencies. It is ironic that, at a time when the Treasury is discussing with the appropriate bodies the text of a White Paper on banking supervision and the text of an EEC directive on banking, the Government should introduce two Bills which lay down systems of banking supervision which will clearly be partly—or, indeed, possibly wholly—outside the scope of the new scheme and will largely duplicate them.
I should be grateful if the Minister could make clear whether the new Central Board will be a purely servicing and supervisory body or whether it will also be a commercial bank. I have already made criticisms in this House of the conflicting functions undertaken by the Bank of England. I hope that this new Board will not have similar conflicting functions.
Despite the criticisms which I have made from time to time about the Bank of England, I think it is the most appropriate body to be responsible for all banking supervision in this country. As the recently-published report on the collapse of London and County Securities shows, the Bank of England has fully undertaken this rôle fairly late in the day, and only as a result of the largely self-generated crisis in the banking world which it brought about. However, the Bank of England is uniquely situated and qualified to perform this supervisory role.
The Treasury has various supervisory functions laid down in the Bill—for instance, approving the appointment of the chief officer of the Central Board. However, I see little rôle for the Bank of England in these proposals. If the Government propose to give it a central rôle in the supervision of banking, in my view it should have a rôle in every sphere of banking. None should be excluded from its oversight, including the Trustee Savings Banks and the National


Giro. One simple way in which this might be done, which I hope the Government will consider, is to put a representative of the Bank of England on the Central Board as laid down in Schedule 1, paragraph 2.
However, the Bill not only potentially weakens the new system of banking supervision which we are to have but makes it more complicated than it is at present by bringing in the Registrar of Friendly Societies to perform certain supervisory functions relating to advertising, which for other banks are carried out by the Department of Trade under the Protection of Depositors Act. Bringing in the Registrar of Friendly Societies to carry out these functions may make historical sense, but it seems to have little logic and only further serves to confuse an already deeply confusing situation. I hope that the Government will think again about that proposal.
Finally, I should like to turn to another matter related to the question of supervision. I refer to the capital adequacy and liquidity of the banks as they develop under the terms of the Bill. I should like to know whether the banks will comply with the new prudential requirements which have been agreed between the Bank of England and the London and Scottish clearing banks published in the September edition of the Bank of England Quarterly Bulletin. I assume that they will also form the basis of the requirements which will be laid down in the White Paper to which I referred earlier. If the Trustee Savings Banks are to comply with those requirements, I should like to know from what date they will do so. These questions relate to the Central Board as well as to the banks. I should be grateful if the Minister could clarify the position. The banks, with the enormous resources available to them, should have no difficulty in arranging their assets to comply with the Bank of England's requirements.
In another place Lord Jacques said:
the banks hope to build up their reserves so as to show, at the end of that transitional period, that they are able and fully capable of standing on their own feet. During the transitional period, the banks will be under the benevolent gaze of the Treasury for two reasons: first, the Government have a continuing commitment to look after the interests of depositors; and, secondly, the banks themselves have a continuous commitment to the main-

tenance of a ratio of investment in the public sector."—[Official Report, House of Lords, 9th December 1975; Vol. 366, c. 844.]
I think that the House needs to know what is meant by
standing on their own feet.
The House also needs to know how long the Government's
commitment to look after the interests of depositors
will last, and what specifically is meant by
a continuous commitment to the maintenance of a ratio of investment in the public sector.
As regards the relationship which the Minister anticipates will exist between the Bank of England and the Trustee Savings Banks and their Central Board, I should like to know whether the trustee institutions will be expected to respond to calls from the Bank for special deposits and to its guidance on the quality and quantity of lending.
I end by reaffirming my general support for the Bill and the new powers which it seeks to give to the Trustee Savings Banks. It is right that they should be developed in the way envisaged. How-ever, I deplore the piecemeal and apparently haphazard way in which the Government are developing their banking policy in relation to both the growth of public sector banking and the system of banking supervision.
I was sorry to see that Sir Athelstan Caroe, the then Chairman of the Trustee Savings Bank Association, in his address to the 1975 annual conference, said:
The longer the interval between the announcement of the Trustee Savings Banks' future rôle and its implementation, the greater the opportunity for our competitors to prepare against the day we finally assume our new status. In particular, I have in mind the proposed extended scope of the National Giro operations which has been annouunced by the Government.
This betrays the wrong sort of attitude.
I should like to see the closest possible co-operation between the Trustee Savings Banks, the National Giro and other banking organisations in the public sector. I hope that the Government will seek to ensure that situation. I also hope that they will think again about the proposed system of supervision set out in the Bill and will make changes to link it in more closely with a better co-ordinated, better operated, more easily understandable and


reliable method of supervision centred on the Bank of England.

8.18 p.m.

Mr. Geoffrey Finsberg: I am happy to welcome the Bill and to join in the tributes to Sir Harry Page, who was one of the most distinguished of local government treasurers, apart from heading the committee of inquiry.
Like my hon. Friend the Member for Sevenoaks (Sir J. Rodgers), I should declare an interest in Trustee Savings Banks. For nearly 25 years I have been a member of a local committee and served on a board which has twice beeen enlarged and taken over. On all occasions my activities were purely voluntary; I drew no sort of fee.
Trustee Savings Banks have grown over the past century and a half by enlisting the help of local people to encourage citizens to put in their money and gradually to expand the services available. The time for this change is long overdue. I can remember saying about 10 years ago that it was only the hostility of the joint stock banks that had prevented the TSB movement from issuing cheques much sooner.
I will try to raise my sights slightly higher than the Trustee Savings Bank of North Staffordshire, important though it clearly is. I am sure that it has many sagger-makers' bottom-knockers among its depositors. But I do not believe that the movement will be able to progress if extra banks are created. I believe that the figure hit upon by the Voluntary Association of Trustees of Savings Banks—not by any dictate of the Government: the Government set a parameter and the trustees, at various area meetings, decided the number—is probably about right.
Perhaps one of the most generous gestures made in this movement is the willingness of London to submerge itself. The London Trustee Savings Bank was itself an amalgamation of three banks. We then merged with the South-Eastern Bank to become the London and South-Eastern Trustee Savings Bank. As a result of these proposals, the bank will now be called the Trustee Savings Bank (South-East). I regret that the title of the capital city will no longer appear in the name of a Trustee Savings Bank.
None the less, I recognise that these small differences should not inhibit the

progress that the banks wish to make. My right hon. Friend the Member for Stafford and Stone (Mr. Fraser) commented on the size of the reserves and was a little unhappy with the figure of about £70 million, which he quoted. My information is that at the end of the 10 years the reserves will be about 7 or 8 per cent., or about £275 million-plus. I am given to understand that the figure satisfies the Government's requirements, but no doubt the Minister will tell us if it is not accurate.
I pay tribute to the Paymaster-General for his interest in and support of the Trustee Savings Banks. We are very much the poor relation of savings banks in the Western world. The powers which up to now have been available to Trustee Savings Banks in this country are minimal compared with those available through-out Europe and Scandinavia, not to mention North America and points even further away. So these powers are long overdue.
In a rather questioning speech, the hon. Member for Thornaby (Mr. Wrigglesworth) made one or two errors and tried to make some assumptions from a reading of two Inspection Committee reports. For example, before he spoke about the reports, he quoted the new general manager of the Central Bank as saying that the banks wished to issue foreign currency and travellers' cheques and the like. We have been doing this for five or six years, so it is no new service.
The hon. Gentleman also said that the Trustee Savings Banks were, to paraphrase, not quite as "with it" as some of the secondary banks. I hope that they never will be. I realise that he was saying that they must get "with it" in the abrasive world that they seek to enter, but the movement has one of the most successful unit trusts and I should have thought that it was well capable of holding its own in the sphere that the Government have agreed upon.
I, too, welcome the retention of the name "Trustee". This was the wish of the banks themselves, not of the Government. Everyone was united against Sir Harry's wish to call the movement "Mutual".
It was also a trifle unfair of the hon. Member for Thornaby to single out of


Inspection Committee reports the fact that there was concern about a number of small discrepancies in one or two Trustee Savings Banks. I doubt whether one joint stock bank or a branch of the National Savings Bank could say with its hand on its heart that it too, at the pace at which people have to operate, did not make mistakes. Even the National Giro has been known to lend money to people without authority. It is a little unfair to take these points in isolation. I recognise that the hon. Member was trying to be generally helpful, but he may have created the wrong impression.

Mr. Wrigglesworth: I hope that I have not created the wrong impression. I am not seeking to criticise staff or abilities. Of course mistakes occur in any organisation. What I am concerned about is that machinery should exist to ensure that the sort of mistakes which can be made are rectified and do not lead, with this new rôle that the banks are taking on, to a much more serious situation than in the past.

Mr. Finsberg: I understand the underlying philosophy that the hon. Gentleman is putting forward. From my own knowledge of the movement and with some practical experience, I do not believe that those responsible for guiding it—or the staff—would lightly have entered upon the prospect of these new responsibilities if they felt that they would not be capable of fulfilling their obligations to their customers.
It has always been the proud boast of the movement that the customer is important. The TBS has always been the small man's bank. I am glad that among some of the new powers which the banks will be able to exercise will be the power to make bridging loans for house purchase. That is a very valuable service.
Of course there must always be a tinge of regret when institutions which have been known for a century or more disappear and re-form themselves into large units. We should not necessarily go overboard for the concept that everything small is beautiful and everything large is ugly. There may be room for something in between. I certainly agree that it would be unfortunate had one Trustee Savings Bank been formed. That would have been a mistake; the geographical spread is about right.
I am glad that the Bill proposes to remove the well-meaning but somewhat claustrophobic Treasury control which has been exercised for many years and which has sometimes been very frustrating to trustees and staff in their efforts to provide even better services for their customers.
I hope that the Bill will be given a Second Reading. The debates in another place were extremely interesting and produced very little difference of opinion on any side of the House. The hon. Member for Thornaby might think that it is unfortunate that there was not enough questioning. From my knowledge of at least one noble Lord, namely, the former Jimmy Hoy, I know that had he listened to some of the remarks made by the hon. Gentleman, he would have launched forth vehemently in support of the trustee savings movement and would have said "No, these questions are not very important." I should have agreed with him in this instance. They are rather more esoteric and are directed to the Government's overall banking policies than merely to the Trustee Savings Banks.
I have already apologised to my hon. Friend the Member for St. Ives (Mr. Nott) and I do so to the House for having to leave and not being able to listen to the winding-up speeches because of the re-arranged time of the debate. I hope that the Bill will receive a Second Reading. I also hope that the many depositors will accept that the new rules of the Trustee Savings Banks will be to their advantage, and that they will have nothing to fear from a gradual unloosening of No. 11's apron strings. I hope that in the 1980s the Trustee Savings Banks in this country will begin to give the same sort of service that their counterparts' customers in other countries have enjoyed for a long time.

8.30 p.m.

Mr. David Knox: Like my right hon. Friend the Member for Stafford and Stone (Mr. Fraser) and the hon. Member for Stoke-on-Trent, Central (Mr. Cant), I have a strong constituency interest in the Bill because of its possible effects on the North Staffordshire Trustee Savings Bank. I am also interested in the Bill because it was only a few miles from where I was born that the Rev. Henry Duncan founded the first savings


bank in Ruthwell in 1810 in the constituency of my hon. Friend the Member for Dumfries (Mr. Monro). I suppose I also have an interest because I was, and for all I know may still be, a depositor with the Lockerbie Savings Bank, which my hon. Friend the Member for Seven-oaks (Sir J. Rodgers) mentioned earlier and which is in the constituency of my hon. Friend the Member for Dumfries.
For a number of reasons, although I do not oppose the Bill, I cannot welcome it quite as warmly as did the Paymaster-General or my hon. Friends the Member for Sevenoaks and the Member for Hampstead (Mr. Finsberg). There is no doubt about the success of Trustee Savings Banks. They are the banks of ordinary people, far more than the joint stock banks. They are the banks that small savers use. One person in five in Britain today has a Trustee Savings Bank account. It is just as well that we should remember that before we think too ambitiously about giving the banks other functions. In those accounts there are deposits in excess of £4,000 million which by any standard, even in these days of inflation, is a lot of money.
Over the past century and a half the Trustee Savings Banks have had a record of great and considerable achievement and they are as successful today as they have ever been. Therefore, one wonders why, in view of this record of success, it is necessary to make some of the changes proposed in the Bill. I can see advantages in changing something that is not working well, but I find it difficult to see advantages in changing something that is working as well as the Trustee Savings Banks are working today.
The Bill stems from the Page Committee's Report on National Savings, to which my hon. Friend the Member for Hampstead referred. That Committee recommended among other things the rationalisation of the 70 Trustee Savings Banks of varying sizes into a small number of regional banks operating under a strong central authority. It also recommended the expansion of the powers of those banks. This rationalisation has already been carried out and there are now 17 regional banks and the North Staffordshire Trustee Savings Bank, which declined to participate in any amalgama-

tion, for reasons to which I shall come in a moment.
At this stage I would merely comment that this rationalisation has been yet another attempt to create bigger units. I only hope that it will not have the same disastrous consequences as so many other recent rationalisations have had. Obviously, there are some instances where bigness is necessary, but the past few years are littered with examples of disastrous amalgamations where bigness has been totally inappropriate. I wonder whether it has been sensible to amalgamate the Trustee Savings Banks, particularly be-because of the close personal relationship which exists between the depositor and his bank. That relationship is of particular importance. I wonder whether in bigger institutions that relationship may not be lost.
I turn more specifically to the North Staffordshire Savings Bank. This is the most successful Trustee Savings Bank in the country for a number of reasons. First, it has about 140,000 depositors, which is well above the already high national ratio of depositors to population. Secondly, in the past year deposits have risen by twice the national average rate of growth. Thirdly, its management expenses are the lowest in the country, representing only £1·26 per £100 of deposits. Fourthly, its profit ratio is the highest in the country.
Compared with the new amalgamated giants, the North Staffordshire Trustee Savings Bank is a small bank. However, it is a small bank with a record of success, and it provides a real service to the people of North Staffordshire. Its successes over the years and at present show that it is meeting a real need for the people of North Staffordshire. There is, therefore, no need for it to amalgamate and no particular need for it to expand or to change the nature of its services.
In fact, the trustees declined to participate in any amalgamation for two very good and substantial reasons. First, they felt that North Staffordshire had little in common with adjoining or near areas. That is obviously true in relation to the Manchester area, Shropshire, or other parts of Staffordshire. Secondly, the trustees were not prepared—and rightly so—to amalgamate with less successful banks to the disadvantage of their depositors. After all, it is hardly fair to the


depositors in a bank—and it would be unfair to depositors in the North Staffordshire bank—if their bank amalgamates with banks making less profit.
However, having, in my judgment rightly, refused to amalgamate, the trustees of the North Staffordshire TSB are now worried about the possible effects of the Bill. Although the North Staffordshire TSB is a successful bank, it is, as I have already pointed out, a small bank and it has deposits of much less than £100 million. This means that under the Bill the bank will not be entitled to a seat on the Central Board, but it will be under the direction of the Central Board.
As I understand it, Clauses 1 and 4 give substantial powers to the Central Board. It would seem that the Board would be able to curtail and interfere with the bank's activities, possibly to the detriment of the depositors. It would also seem that the Central Board could use its power to force the North Staffordshire TSB to amalgamate with some other bank. Both possibilities rightly worry the trustees. Already, before the Bill has been passed, pressure has been put on the trustees—the hon. Member for Stoke-on-Trent, Central mentioned this—to amalgamate with other banks with which they have little in common. The trustees are afraid, not surprisingly, that once the Bill becomes an Act, overwhelming pressure will be placed upon them to agree to some ridiculous amalgamation.
I hope that the Minister will be able to assure the North Staffordshire TSB, first, that under the Bill the Central Board will not be able to force the North Staffordshire TSB to amalgamate against the wishes of the trustees and against the interests of the depositors; secondly, that individual Trustee Savings Banks will be free to pay such rate of interest as their profitability allows; thirdly, that the Central Board will not be able to do anything to destroy the expansion by individual banks of their savings accounts business; fourthly, that the Government will consider amending the Bill to reduce the deposit qualification for the Central Board to such a level that the North Staffordshire TSB is entitled to a seat on the Board.

8.39 p.m.

Mr. Hector Monro: I hesitate to intervene in this North Stafford-

shire debate, which has been putting the case so clearly. Indeed, I am beginning to have grave doubts about the Bill the more I listen to the debate. My hon. Friend the Member for Leek (Mr. Knox) was born, as he said, in Dumfriesshire, near to the very heart of the beginning of the savings bank movement.
The Minister, in opening the debate, referred to the Page Report, which recommended rationalisation of the Trustee Savings Banks—that is, the closing of smaller branches and amalgamating them into a number of large banks suitably placed in any particular region. The Bill will give greater participation by depositors if they really want it, though I do not know whether they do, and will also set up a Trustee Savings Bank Central Board. I wonder what that will mean in terms of salaries and pensions. There may be good intentions, but I am far from certain that there will be any improvement in the services or the expert advice already in existence at local level; and there may be increased expenditure.
I may be wrong, but I do not like casting away local pride and local branches. I feel that this is certainly unlikely to happen in my own area of Dumfrieshire. I am glad to speak in this debate because Sir Henry Duncan was born at Ruthwell, in my constituency, and many of us went there in October 1974 to celebrate the anniversary of his birth. It was in the middle of an election campaign but it was well worth attending that very splendid function. It is most interesting that the three banks nearest his birthplace—at Dumfries, Annan and Lockerbie—are still independent.
I want to put a question to the Minister on a subject raised by my hon. Friend the Member for Sevenoaks (Sir J. Rodgers). It may be a Committee point, but if I raise it now the Minister will have more time to think about whether an amendment is required when we come to the Committee stage. The point, which was raised in another place, is whether a savings bank which is not a Trustee Savings Bank can continue to invest funds in loans over heritable property in Scotland. At present the banks have power to do so under the Trustee Investment Act 1961, Schedule 1, part II, paragraph 13.
The noble Lord, Lord Jacques, replied by letter to my noble Friend Lord


Drumalbyn on 28th January 1976. I quote his letter:
The Trustee Savings Bank Bill is intended to give the Treasury powers, under paragraph 22 of Schedule 3, to approve 'assets of such other classes (including loans to a depositor or customer of the trustee savings bank) as may be designated'. I am glad to be able to say that if the Dumfries Savings Bank (and the other Scottish Savings Banks) did decide to join one of the Scotish regional Trustee Savings Banks, the outstanding loans made on heritable property would be so designated by the Treasury and would then not need to be repaid.
The crucial word in that letter, which I was grateful to receive from my noble Friend Lord Drumalbyn is "if"—if the bank decided to join one of the regional Trustee Savings Banks. That gives a very strong hint that, unless the bank is prepared to conform and join one of the larger groupings, it might not be able to continue its policy over very many years.
I would like the Minister in replying to give me a little information. Would it be possible, and most certainly will it be possible without taking the steps about which there is much concern, to join or not to join the larger movement?
Then, what about future loans in relation to the subject of loans over heritable property? This is very important in an area where agricultural land is offered frequently as security. Will these non-trustee banks be able to make loans in the future? I am referring, of course, to making new loans rather than continuing existing loans. If the directors are prudent—and all savings banks directors are very prudent—and keep within their liquidity ratios, can new loans be made on this basis?
Finally, I repeat a point which has been dealt with in principle by all right hon. and hon. Members representing Staffordshire constituencies. Should a non-Trustee Savings Bank go into the movement? I hope that the Minister will spell out the advantages for a savings bank, as it stands at present, to amalgamate with one of the two big groupings in Scotland—or are there advantages in staying independent, giving exceptionally good advice, knowing local conditions and knowing the local people? Should all that be given up to come within this larger grouping? This is the crucial point which the Minister has to answer not only

in relation to the much smaller banks in relative terms in Dumfriesshire but in the bigger context of the bank in Staffordshire.
I appreciate the great importance of the savings movement, and it has been epitomised by savings banks over 150 years. Everything that we can do to help them to bring in new depositors and to provide better services is to the good and to the advantage for the future. The banks have done a tremendous job in building up agriculture and industry over this period and in providing a sound place for the individual to deposit his savings.
I have these few fears and these few important questions which I leave with the Minister, but in general I accept the principles of his Bill.

8.48 p.m.

Mr. Ian Stewart: I do not wish to delay the House for very long, but I think that it is proper for a tribute to be paid by a practising banker to the staffs of the Trustee Savings Banks, especially those in the Central Trustee Savings Bank, who, by the conduct of their business over many years, have established such good credentials for allowing their movement to develop into some of the wider areas of banking. In declaring an interest as a banker, I am happy to learn that the bank which has employed me for 15 years was formed in 1810, like the first of the Trustee Savings Banks.
The situation has changed since then, of course, and in general we all welcome the sensible amalgamations which have occurred. A development of this kind depends considerably on the good will and the consent of the constituent bodies and, although I did not expect to be greeted by the strength of the Staffordshire lobby in this debate, I think that right hon. and hon. Members representing Staffordshire constituencies had an important point to make in that, where a savings bank has established its own identity with such success and in such an individual way, it is a pity if its qualities and abilities are submerged in a wider grouping. I hope the Treasury Ministers will look again at this point.
One of the main aspects of the Bill is that it does not follow some of the odder suggestions in the Page Report.


It has not adopted the term "mutual banks", let alone the Page Report's first choice, which was for "people's mutual banks", which has a terrible connotation of economic collectivism which I am sure that we are wise to avoid.
Equally, on the financial aspects it has avoided the suggestion that the reserves of the Trustee Savings Banks should be topped-up at the outset by some grant from the Treasury and has said that they should be allowed to be built up gradually during the transitional period. I am sure that that is preferable. The Paymaster-General mentioned that there was a deficiency, which at the end of 1972 had been £117 million on the Fund for the Banks for Savings and that it was now £200 million. If I understood him correctly, he said that this would have worked itself off by 1983.
The hon. Member for Thornaby (Mr. Wrigglesworth) rightly asked whether it was wishful thinking on the part of the Treasury that by that date the fund would be able to come back into balance, or whether all of the stocks were short-dated and would have matured within seven years. It would be helpful to know what the position is about the volume of funds of the Trustee Savings Banks at present represented by the deposits with the Fund for the Banks for Savings. The hon. Member for Thornaby raised another important point—namely, the tendency of the number of bodies involved in banking supervision to proliferate. I emphasise that. I shall not rehearse the arguments put forward most effectively by the hon. Member.
It seems, if the ultimate intention is that the Trustee Savings Banks should come under the credit control and supervision of the Bank of England, that it would be better if this were to happen sooner rather than later. I hope that the Financial Secretary will be able to reassure us that one of the reasons for this not happening at the outset is not that the Treasury has some ulterior motive and is working against the interests of the depositors in that under the present system, indirectly, the funds of the Trustee Savings Banks support an important part of the National Debt. It would be right, in setting up new arrangements for the Trustee Savings Banks, and recognising this wider interest of the customers, for this to be dealt with at the beginning.
I draw a contrast between these welcome proposals, for the Trustee Savings Banks—which have established their credentials by wise commercial behaviour over many years—and the proposals to give wider banking powers to the Giro. It seems absolute nonsense to attempt to produce a profit for Giro by grafting on to what is no more than a mechanical payment transfer system wider powers of commercial banking, with all the inherent risks, in the hope that this will enable Giro to make profits to offset the losses it has suffered.
The contrast is between not only the powers which are to be given to these two bodies but the ways in which they are to be developed. The granting of overdrafts and personal loans to customers of the Trustee Savings Banks is a perfectly natural extension of the existing functions of these banks and is thoroughly to be welcomed. The Page Report drew attention to the difficulty of defining a boundary between personal loans and loans for personal businesses. There is no absolutely clear boundary between personal and corporate borrowing. As I understand it, the Paymaster-General said it was clear that there was to be no corporate lending by the Trustee Savings Banks. I welcome that although I do not welcome the proposals for Giro.
My hon. Friend the Member for Hampstead (Mr. Finsberg) talked about some of the wider powers and activities of other savings banks in the rest of Europe. I would certainly be unhappy if it was ever to be contemplated that our savings banks should be allowed to engage in the sort of activities in the wider commercial banking area and internationally which have led some of the West German banks into serious problems in recent years. I hope that we can rely on the Treasury and the Bank of England or other supervisory powers which dictate these matters in the future to ensure that that kind of thing does not happen.
The Bill, and the proposals for the Trustee Savings Banks have been widely welcomed in banking circles. The admission of the Trustee Savings Bank to the clearing system in the City is evidence of that. The banks' performance and cautious but steady growth in the past few years augurs well for the development of the Trustee Savings Bank movement in its new rôle.

8.56 p.m.

Mr. James Kilfedder: The Trustee Savings Banks have had an honoured and successful history since they were established 160 years ago. The movement has now become part of the nation's fabric. The savings, which were deposited through the thrift and hard work of working people together, with the hard work of the staff and the dedication of the trustees, contributed to the success of the movement.
But it has not been easy going. The movement has been through difficult periods. Sometimes the Trustee Savings Bank faced opposition from the clearing banks and the City but, to its credit, it was not intimidated. It served the modest saver and it now has unit trusts and cheque accounts, despite opposition from other banks.
As the Minister said, the Trustee Savings Banks have played an important part in the history of the country and have an even more important part to play. The enabling Bill confers new powers on the Trustees Savings Banks, including the ability to make personal loans, to grant bridging loans and to allow modest overdrafts. The new powers will help the movement to serve the community further.
Reference has been made to Great Britain. In the House of Lords reference was made to England, Scotland and Wales. Everyone appears to have forgotten that Trustee Savings Banks also exist in Northern Ireland. Hon. Members have referred to the success of various banks in Great Britain, but they should recognise that the Trustee Savings Banks in Northern Ireland acted as pace setter for banks in the rest of the United Kingdom.
The Trustee Savings Bank in Northern Ireland has become a regional bank with funds of £200 million. Amalgamation of the banks in the Province has been carried out and I think it has operated as a regional bank since 21st November 1974. I believe that this was about a year before regional banks came into operation in Great Britain. Let us therefore pay tribute to the Trustee Savings Banks in Northern Ireland. There are 55 branches in Northern Ireland with a total of 600,000 accounts. They have not been slow to use the powers that were granted

to them some time ago. Twenty-five thousand cheque accounts have been established in Northern Ireland since the system was set up, in February 1970. All this has been done despite seven years of terrorism.
Tribute should be paid to the staff who have managed to carry on so successfully. Tribute should also be paid to the depositors who have continued to save their money. The Trustee Savings Bank movement in Northern Ireland is an example which other Trustee Savings Banks in Great Britain might follow.
I welcome the Bill on behalf of the staff, the depositors and the Trustee Savings Banks in Northern Ireland. The savings banks are ready to provide new services for the depositors, and it is hoped that new customers will come forward. The Trustee Savings Banks deserve public support.

9.1 p.m.

Mr. John Nott: We generally welcome the Bill, although my hon. Friend the Member for Leek (Mr. Knox) and, to a lesser extent, my hon. Friend the Member for Dumfries (Mr. Monro) have certain reservations. The Bill follows on the recommendations of the Page Committee. It is based upon discussions and consultations first set in train when we were in office. Naturally, the Labour Government had to take up the matter from where we left off in February 1974, but I am glad to see that the conclusion of the discussions is now embodied in the Bill.
Although this is very much a Committee Bill in the sense that we shall want to examine all the clauses in rather more detail upstairs, I am sure that we were right to have a Second Reading on the Floor of the House. The debate has brought out the great loyalties, the local feeling, and the regional interests which go back to the beginnings of the Trustee Savings Bank movement. Many of my hon. Friends have devoted a great deal of time and interest to the movement. It was useful to have interventions from my hon. Friends the Members for Seven-oaks (Sir J. Rodgers) and Hampstead (Mr. Finsberg). My hon. Friend for Hampstead has been connected with the movement for 25 years. That takes my hon. Friend back quite a long way. He enjoys an impressive record.
The Bill marks a major change in the structure and future status of the Trustee Savings Banks. It is right that in Committee we should consider many of the clauses in some detail. I take this opportunity to congratulate all those who have served the movement so devotedly over the years as unpaid trustees, friends of the movement and employees. Further, it is right to congratulate the movement on the enthusiasm and speed with which the amalgamations have taken place.
One paragraph in the Page Report sets out very well some of the conflicting views which were received from the movement when the Page Committee was sitting. I suppose that it must have received those views in 1972 when it was taking evidence. Paragraph 189 makes the point that the Trustee Savings Bank Association
clearly had to reconcile the conflicting views among their member banks. Many in the trustee savings bank world seem to believe that the Government guarantee is the rock on which they stand and that their strength lies in their essentially local character.
The Report then refers to the building societies where no such guarantee exists, and the loyalty to the National Savings Bank which is not local in any way. It continues:
The National Savings Bank has national coverage and the largest of the trustee savings banks cover areas in which local acquaintance with trustees and their contact with depositors must be minimal.
The Report goes on to say that on the other hand the Committee met many people in the movement who were anxious to move into new fields and to broaden and develop contacts with other banks. I remember that at one time when I was in the Treasury I had minor responsibility for savings matters. In 1972–73 there was a slight generation gap in the movement between those who favoured more traditional ways of proceeding and some younger members who wanted to move ahead.

Mr. Wrigglesworth: Was that why the Government left the 75-year-old limit in terms of retirement?

Mr. Nott: I had noticed the 75-year limit. I had a different thought in my mind. I believed that the Government required some precedent for appointing 80 and 90-year-old members to the board of the BNOC. I know that they have appointed one member of 25 which brings

the average age of BNOC down to about 75.
The hon. Member for Thornaby (Mr. Wrigglesworth) was a little unfair to talk about the banks being pitchforked out of their peaceful existence into a more abrasive and risky world, and he wondered whether the staff were adequately equipped to carry out the tasks. I see the point made by the hon. Gentleman, but there is an enormous amount of experience and inherent caution in the Trustee Savings Bank movement. One can compare the experience of management in this respect with the other banking sector named in the Queen's Speech. I refer to the Giro, which seems to be speeding headlong into areas which that organisation has neither the experience nor the foresight to embrace, particularly in dealing with foreign exchange and other matters. I have great confidence in the capacity of the Trustee Savings Banks and their managements to move slowly into these new areas of activity.

Mr. Wrigglesworth: Would the hon. Gentleman like to compare the situation with the 30 or so banks that would not exist at present but for the lifeboat operations carried out in the City which have saved those banks from falling into difficulty?

Mr. Nott: The hon. Gentleman made that interesting observation in his remarks and it was taken up by my hon. Friend the Member for Hitchin (Mr. Stewart) in a short intervention. He mentioned the supervisory aspect of banking and the relationship of the Bank of England to the Central Board. The hon. Member for Thornaby said that the Giro, the National Savings Bank and the Trustee Savings Bank should come under the overall supervision of the Bank of England. That touched a spark of agreement in my mind and no doubt my hon. Friend the Member for Hitchin would agree. No doubt we shall examine that matter in Committee.
The whole existing state of banking legislation is unsatisfactory and needs reforming, and I am sure that it will be reformed. That is an important subject which requires further examination on another occasion.
I am sure that the decision to move in the direction proposed by the Bill is right. Progress undoubtedly will be slow.


There are millions of depositors and trust must be maintained.
The hon. Member for Stoke-on-Trent, Central (Mr. Cant) said that it must be disturbing to a number of local banks to be pushed in a direction in which they do not want to go. I remember other occasions when a county has been merged with another area and when there has been difficulty. If the North Staffordshire Trustee Savings Bank regards everything to do with Nottingham and Leicestershire as obnoxious and strange, maybe the Treasury needs to look at this aspect again. I am not able to judge, but perhaps we can look at this matter in Committee.
I am not entirely sympathetic with the observations of my hon. Friend the Member for Leek. The high moral tone which was associated with the formation of a Trustee Savings Bank is one—I do not mean this in any cynical sense—which he has often introduced into our debates. Having been born near the founder of this movement, I listened to what my hon. Friend said with great interest. However, it is rather difficult, if the overall view of the movement is for amalgamation, for one bank to say that because it has been very successful and its profits are very high, it has a right to hold out independently. Nevertheless, I hope that my hon. Friend will join us during the Committee stage of the Bill so that we can debate the independence of this bank at greater leisure.
It is right that my intervention should be short. I took the liberty of reading the speech of Lord Amory, for whom I have great admiration as an ex-Treasury Minister, as a West Countryman and because he is an ex-politician who can confine his remarks to about three minutes. On this occasion I have set out to do the same.
I read with great interest an extract in the Page Report. Paragraph 89 refers to some of the letters which were exchanged at the time the movement was founded. A report entitled "Summary View of Report and Evidence Relating to the Poor-house 1818" was written by S. W. Nicholl. He said:
In every new disciple of the Savings Bank I see at least two apostates from the Poor Rate and in 15 to 20 years there is no reason to doubt"—

this was in 1818—
that the inherent and progressive principle of the Savings Bank will have not only stopped the progress but will have entirely routed the influence of its antagonist the Parish Rate".
There are about 5 million or 6 million people receiving social security benefits of one sort or another and 17 million people dependent on the State in one way or another, as employees or in receipt of benefits. Although the Trustee Savings Bank movement has made enormous strides and been an extremely valuable feature in our national life, alas, the Poor Rate, or its modern equivalent, does not seem to have declined in its importance with the rise in the importance of the Trustee Savings Bank movement.
This has been a useful but short debate. We shall want to spend some time on the details in Committee. However, in our view generally this is an uncontroversial measure and one that we welcome. I am glad that the Government have brought it forward.

9.13 p.m.

The Financial Secretary to the Treasury (Mr. Robert Sheldon): Naturally I too, am pleased with the general welcome, sometimes muted and sometimes a little involved, that has been given to the Bill. One matter which did not surprise me, although it is always interesting to hear evidence of it, is the large amount of local pride evinced about the Trustee Savings Banks. This is a feature that has always been associated with this movement.
The movement has always had a number of very specific and real advantages which have kept it going over a long period. It has had the moral guidance which was referred to by the hon. Members for Leek (Mr. Knox) and Dumfries (Mr. Monro). The banks have had low levels of expenses. In the early years of the Banks' formation a great number of people were prepared to give of their time and that achieved some of the efficiencies which were then not too readily available to small savers.
Small saving by its very nature can be a rather expensive operation to organise and the great merit of the Trustee Savings Banks is that they take in large numbers of fairly small sums and so are able to give to their depositors comparable rates


—and in some cases higher rates—than those with larger sums to invest are able to secure elsewhere. This was the great justification for the whole movement that was started in the constituency of the hon. Member for Dumfries. Together with this there remains the specialisation which these banks are still able to employ, specialisation and expertise in the interest of the small investor.
These are two essential bases upon which the development of the TSBs rests. But it also rests upon a third factor on which we heard a considerable amount of eloquence from my hon Friend the Member for Stoke-on-Trent, Central (Mr. Cant), the hon. Member for Leek and others, and that is local patriotism. It is the combination of expertise and knowledge of the community that gives the Trustee Savings Banks their force today. People engaged in this movement know their locality and their customers and they know the business of small savings. When we consider the enlargement of their role, therefore, we must make sure that we lose none of the advantages which it is essential to retain.
My hon. Friend the Member for Thornaby (Mr. Wrigglesworth) spoke of the need to retain the confidence of depositors. I could not agree more with him. This applies in all banking operations. It is an essential factor, but perhaps in a certain restricted way it applies even more to the small investor who may not be sufficiently knowledgeable. The kind of arrangement which would satisfy those who are more sophisticated and have a greater understanding of the financial world might not be sufficient to satisfy the small investor. When my hon. Friend the member for Thornaby spoke of the need for caution, I was wholly with him. I think that what I have to say might go some way to satisfy his very real concern.
With the changing approach which is represented by the Bill the Trustee Savings Bank will assume a larger rôle. I am sorry that it does not include, as my hon. Friend would wish, a co-ordinate approach between the clearing banks and Giro, but this is not lacking from the Government's intentions. As he knows, there will be new banking supervisory legislation which will deal with the Trustee Savings Banks and Giro among

others. That is something for another legislative occasion and it cannot be dealt with by this Bill. I hope that my hon. Friend is satisfied with that assurance.
A lot of the questions put to me tonight are matters for the new Central Board once it is established. But in so far as we can predict what might happen I shall attempt to answer them. The strong and concerted efforts by hon. Members in connection with the North Staffordshire Trustee Savings Bank must be dealt with first. I have been aware of the representations made on this matter and of the correspondence that my right hon. Friend the Paymaster-General has had with a number of hon. Members about the amalgamation and its effect upon the North Staffordshire Trustee Savings Bank.
Although the Bill is based on the assumption that the Trustee Savings Bank movement will be strengthened by the regional groupings envisaged in the Page Report, it does not require any particular kind of regional grouping. Any grouping involving the North Staffordshire Bank is essentially a matter for the Board and the bank's management to discuss in detail in the first place. There may be some misunderstanding of the positions on either side. I am advised that a delegation from the Trustee Savings Banks Association is to meet the North Staffordshire bank's management in a week's time to go over the whole matter again. I can assure hon. Members that there is no question of negotiations under duress and what is sought here is an advantage not only for the bank, but for its depositors generally. I am sure it is in that light that the new Board will deal with the matter.
My hon. Friend the Member for Thornaby, the hon. Member for Hitchin (Mr. Stewart) and others referred to the problems facing Trustee Savings Banks when they are pitchforked into the competitive world. Perhaps I can offer some reassurance. The headquarters of the Central Board will be in Gracechurch Street—in the very vicinity of the Bank of England—a fact I am sure my hon. Friend the Member for Thornaby will welcome.
Trustee Savings Banks are not run by an incautious body of people. They have long experience of the financial affairs


of the community they serve and the kind of customers with whom they have dealings. Although it is hoped that they will acquire a newer kind of expertise, the legislation has been based on the fact that this will take some time and separation from control will be as gradual as my hon. Friend the Member for Thornaby would wish. The general policy will be the maintenance of a very high level of liquidity with little expansion, certainly no rapid expansion, where there is little experience.
It is expected that out of a total of £4,460 million, the personal loan scheme will amount to about £35 million—considerably less than 1 per cent.—by November 1977. Even a year later it is only expected to reach £50 million—just about 1 per cent. This indicates that the policy of caution will be about as complete as most hon. Members would expect.
It is the aim over this period that there should be an increasing provision of common services—unit trust facilities have been mentioned and further expansion in this field is envisaged—and we shall allow the banks to set their own ceiling, bearing in mind the control we shall continue to exercise and the monitoring which will be possible over this period.
The hon. Member for Dumfries talked about heritable loans. If the Dumfries Bank opts out of joining the Trustee Savings Banks in the new system, it will continue as it is at the moment. That is the general message.
I agree with what my hon. Friend the Member for Thornaby said about the importance of the Inspection Committee. The Central Board will take over this rôle and will provide the staff to pursue the accounting and audit efficiency which is an essential requirement in the operation of Trustees Savings Banks. My hon. Friend the Member for Thornaby and the hon. Member for Hampstead referred to the deficiency in the Fund for the Banks for Savings. As my right hon. Friend said, the deficiency is £200 million, and we aim to eliminate it during the 10-year period. I give the assurance that if there is a deficiency at the end of the day, the Treasury will pay it out under the Trustee Savings Bank Act 1969.
So we have the launching of this new venture. As one would expect, there is nothing too dramatic in a Bill which deals with these banks of varying talents and considerable local pride and interest. Commanding the support of the people in the areas in which they operate. We are making sure that the Trustee Savings Banks are able to play their part in providing the kind of banking services they have provided until now, extending them modestly and cautiously over the period ahead and making sure that, as success is shown to be apparent, so the controls can be relaxed slightly, piece by piece, until finally we achieve the third force in banking which was the vision of the Page Committee.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills.)

WAYS AND MEANS

TRUSTEE SAVINGS BANKS

Resolved,
That, for the purposes of any Act of the present Session to establish a Trustee Savings Banks Central Board; to confer wider powers on trustee savings banks; to transfer to the Registrar of Friendly Societies certain functions previously exercised by other persons; and for purposes connected therewith, it is expedient to authorise the payment of any sums into the Consolidated Fund.—[Mr. Robert Sheldon.]

DAMAGES (SCOTLAND) BILL [Lords]

Order for Second Reading read.

Ordered,
That the Bill be referred to the Scottish Grand Committee.—[Mr. Harry Ewing.]

ARMED FORCES BILL

Ordered,
That the Select Committee on the Armed Forces Bill have power to send for persons, papers and records.—[Mr. Dormand.]

Ordered,
That Three be the Quorum of the Committee.—[Mr. Dormand.]

ADJOURNMENT

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Dormand]

NORTHWICH (SWING BRIDGES)

9.28 p.m.

Mr. Alastair Goodlad: I am grateful for the opportunity to bring to the attention of the House the important matter of the condition of Town Bridge and Hayhurst Bridge in Northwich and the potentially serious consequences for the town of any failure by the British Waterways Board, which is responsible for the bridges, to exercise the utmost diligence in carrying out its responsibility.
Hayhurst Bridge and Town Bridge were both built at the end of the last century to carry traffic across the Weaver Navigation. They are swing bridges, each with a carrying capacity of 32 tons and a permissible load height of 16½ feet. They were designed to carry horse-drawn traffic, and it is a tribute to their designers and builders that there have been no major accidents on them or repairs to them until relatively recently.
However, in the course of an inspection of Hayhurst Bridge in June last year, deterioration was found to have taken place in the steelwork which called for early attention. The bridge was closed to traffic on 1st July and reopened on 11th July, with a 1-ton weight limit and one-way single-line working. A temporary strengthening scheme was completed on 23rd September, and the bridge was reopened to single-way working in alternate directions and to normal full-strength standard on 24th September. That remains the position, and the British Waterways Board states that major works will be required to achieve continuous two-way full-strength working. These works are being progressed in conjunction with the Vale Royal District Council. It is not know how long they will take to put into effect, although this is a matter of vital concern to Northwich.
A similar inspection of Town Bridge in July last year revealed the need for strengthening work. The scheme of strengthening was devised in August, and the first stage of the work was completed

on 23rd September. During this period full two-way working to full-strength loading was maintained. The second stage, involving the introduction of longitudinal steel girders underneath the bridge, was subsequently carried out. I pay tribute to the men who worked in unpleasant climatic conditions to ensure that the necessary work, which was carried out between the hours of midnight and 6 o'clock in the morning over a period of weeks, was completed. The Waterways Board has, however, stated that major works will be required in the long term, as at Hayhurst Bridge, to deal with the problem on a permanent basis.
By way of further explanation, I should point out that Town Bridge and Hayhurst Bridge are the arteries of Northwich.
The matter before the House is not one of purely local interest. Northwich supports on either side of the Weaver not only a substantial part of one of the biggest chemical complexes in Europe, being part of the Mond division of ICI, but a substantial trading community which services a large catchments area stretching into the countryside for many miles around.
It is of vital concern to Northwich that the bridges should at the very least be in complete working order and that in the long term the town should be served by a new high-level bridge. Very long traffic jams have been experienced in recent months. Indeed, even when the bridges are fully operational the fact that lorries and buses cannot pass one another on the bridges inevitably leads to delay. For example, complete chaos took place on 30th October last when Town Bridge became jammed partially open and vehicles had to be diverted to Hayhurst Bridge, which was, and is, restricted to single-line traffic because of the repair work. Many vehicles had to make a detour of several miles. The specter of a simultaneous closure or partial closure of both bridges is of serious concern to the people of Northwich and, I hope, to this House.
Perhaps I may be allowed to illustrate the strength of feeling on this matter, not only of myself but of people in Northwich, by quoting briefly from the editorial in the Northwich Guardian on 25th September last year:
The vulnerability of Northwich, because of its reliance on two swing bridges for easy access to the town centre, has long been recognised.


Even with both bridges in full operation the present-day traffic pattern is stretching them to the limit. With one out of action or subject to restrictions in its working then the town's normal existence is hanging on a slender thread indeed.
Planners have recognised this in the past and the proposed high level crossing of the Weaver to the north of the town was their answer to the situation they saw would arise. It is the answer, but with present restrictions on finance few of us sitting in traffic queues today are likely to be around to use it. That being so, we have no option but to rely on the two swing bridges and their proper maintenance by British Waterways. And this is the real worry of the matter.
Are British Waterways aware of the vital part these two bridges play in the town's life? Are they aware that maintenance, when required, should be on a 24-hour a day basis so that interruption to the town's shopping and business life is kept to an absolute minimum? Northwich Town Council and Northwich Chamber of Trade think not—and Vale Royal Council are also doubtful.
British Waterways' plans for the huge silt lagoons at Hartford were a classic example of how to get maximum adverse publicity without really trying. The Town Bridge mishap earlier this year was another example of poor public relations and evasive answering of pertinent questions. The present trouble at Hayhurst Bridge suggests to most folk a typical 'couldn't care less' attitude and a complete indifference to the concern of the public. Is there a nationalised industry that really does give a damn about the people who are, in fact, its owners and employers?
In its edition of 16th October, the Northwich Guardian proceeded to comment:
To us it seems that the thinking of those in control of our rivers and canals also represents an era long since gone. For even after months of complaint and protest British Waterways top people seem unable to grasp the urgency of the situation facing Northwich, with one of the town's two swing bridges only in partial use and fears that the other might also be in trouble.
Are they really concerned? As we said here a few weeks ago our own opinion is that British Waterways don't give a damn for Northwich and its people. They have an expensive Press Department in London. So far the only communications we have had from them are those we have telephoned and asked for. Surely the purpose of such a department is to keep people informed of British Waterways' activities?
If they are silent over such an issue as that at Northwich can their existence be justified? It would appear not, especially when one remembers they were also equally silent over the setting up of silt lagoons to deface the Hartford countryside not so long since. Just what does the Press Department of British Waterways do?
Similarly, at local level, the officials should be able to write letters that do not cause the

Northwich Town Clerk to have to write chiding them for their tone and apparent disregard for the gravity of the situation. That is a condemnation that no private industry could afford to accept.
We have seen over this affair a miserable performance by British Waterways. It is still not too late for them to sort the matter out and show Northwich that they care. If not, we can only hope our Member of Parliament will go right to the top to try and bring a little 1975 thinking at the head offices of an organisation that can apparently pass a bridge as safe, inspect it every month for five years and then find it is in such a bad condition that it needs replacing.
The Waterways Board has said that it has three choices for Hayhurst Bridge—first, to carry out further works to the existing structure; second, to provide a completely new swing bridge at the same site or elsewhere; or third, in conjunction with the highway authorities, to provide a new fixed high-level bridge at the same or another site. It is of vital importance to Northwich to know what is the Board's intention towards Hayhurst Bridge and Town Bridge.
I am extremely concerned also at the reported contention of representatives of the British Waterways Board at meetings with those concerned in Northwich that the concern of the Waterways Board is for waterborne traffic, with traffic flow over bridges being of secondary importance. I hope that the Minister will be able to tell us that that is not so.
I should like to take this opportunity to pay a tribute to the forceful way in which the Northwich Town Council, the Northwich Chamber of Trade and the Vale Royal Council have represented the views of those to whom the smooth running of the bridges is so vital to the Cheshire County Council, the British Waterways Board and the Department of the Environment.
I very much hope that the Minister, whose Department is responsible to Parliament and to the country for the operations of the British Waterways Board will tonight be able to give the House a full statement of his plans for the crossing of the Weaver Navigation in Northwich in both the short and the longer term.

9.40 p.m.

The Minister of State, Department of the Environment (Mr. Denis Howell): I am grateful to the hon. Member for Northwich (Mr. Goodlad) for the tone of his remarks, although he was a little


hard on the British Waterways Board, a subject with which I shall deal in a moment. I am particularly grateful to him for what he said about my Department and for giving me such full and adequate notice of the matters which he raised. For a Member who did not wish to chide the British Waterways Board—I took note of his words—for the tone of its letters, I thought he was not doing too badly when he said that the British Waterways Board did not care a damn about his constituents and that it had an expensive Press department, which was obviously a quotation from his local newspaper, and made with its agreement. The number of people employed in that vast expensive Press department can be counted on the fingers of one hand. I do not think he did his case much good by exaggerating the situation.
The hon. Gentleman spoke about the British Waterways Board's plans for silt lagoons at Hartford and he sought to illustrate the Board's insensitivity to public opinion. I am advised that that proposal was made about three years ago—there is nothing new about it. It involves the resumption of tipping of dredgings on land which had previously been used for that purpose. It is possible that the Board should have liaised a little more effectively with the local authority or the local population, but there can be no doubt that that was the purpose for which the land was originally bought by the British Waterways Board, that it has previously been used by that Board, and that the Board is fully entitled to resume using it for that purpose.
Similarly, if I may chide the hon. Gentleman a little, he spoke about the Town Bridge mishap which occurred on 30th October when the bridge jammed partly open. On that occasion I understand that the bridge was out of use for 45 minutes around lunchtime. On 26th September the bridge was out of use for 35 minutes in mid-morning and on 17th August it was out of use early that Sunday morning. I am sure the hon. Gentleman will agree that those incidents could not be foreseen. I am sure that the local employees of the Board do all they can to bring the bridges back into use with the minimum of delay.

Mr. Goodlad: I used the example of the time when the bridge was out of action for a short period to illustrate the

complete chaos that can result when such a thing happens and to show the serious nature of the danger to the town of the bridges being out of action simultaneously.

Mr. Howell: I appreciate what the hon. Gentleman says and I shall deal with it shortly.
The British Waterways Board is not the highway authority. It is responsible only for the canal system. The highway authority is the local authority. I am advised that generally the Board keeps in close touch with Chester County Council, the local highway authority, the Vale Royal District Council and the police whenever there is likely to be foreseen interference with road traffic movements. I am told that there is co-operation.
In fairness to the Board, there is another aspect on which I must comment. The hon. Gentleman referred to local Press comments that the Vale Royal District Council was doubtful about the Board's handling of the emergency repairs to Hayhurst Bridge and to Town Bridge. That is not so. That Council took the trouble to write to the Board complimenting it on its actions—which is slightly at variance with the hon. Gentleman's remarks.
It might be as well to dwell for a moment on the size of the problem facing the British Waterways Board. That Board manages 2,000 miles of inland waterways and its main task is to provide for navigation on the commercial and cruising waterways which total some 1,400 miles. The Weaver Navigation, which is the cause of these difficulties, flows through Northwich and is a commercial waterway. Many roads cross the Board's waterways, and it is responsible for maintaining some 1,100 highway bridges. Hayhurst Bridge and Town Bridge, Northwich, are highway bridges which are maintained by the Board, as the hon. Gentleman said. However, both of these swing bridges were constructed around the turn of the century.
The duty of the Board as regards highway bridges which belong to the Board is laid down in Section 117 of the Transport Act 1968. This means for Hayhurst Bridge and Town Bridge maintaining them to the normal full strength standard. Both bridges were assessed in 1969


under Operation Bridgeguard, which was the scheme for bringing sub-standard public road bridges up to the regulation strength. After minor works to Town Bridge, both were then declared, in 1969, to be full strength.
The roads which the bridges carry are county roads. Unfortunately, in 1975—moving up to date—an inspection of Hayhurst Bridge showed that some of the steelwork had deteriorated, and the bridge had to be closed to traffic on 1st July. Following discussions with the Cheshire County Council, the Vale Royal District Council and the police, the Board carried out emergency works. The bridge was re-opened on 11th July with a 1-ton weight limit and single-way working. Further works were carried out on 23rd September, and then the bridge was upgraded to single-way full strength working, with traffic lights.
The Town Bridge was inspected in July 1975 and showed a similar deterioration to steelwork. Both bridges having been built at the same time, it is not surprising that they started to deteriorate at roughly the same time. Again, emergency work had to be carried out during August, I am glad to say that on that occasion without the need to restrict traffic. More work was done during November and December which involved closing the bridge to traffic each night from midnight to 6 a.m. Two-way full-strength working is now in operation.
It seems, therefore, that the Board has done what it can to accept its responsibilities—I am sure that the hon. Gentleman will agree that the prime responsibility is the safety of the bridges and putting that matter right—and to carry out its work with the least inconvenience to the local population and in consultation with the authorities concerned.
I should add that an important point is that the traffic restrictions were imposed not by the Board but by the local highway authority. Therefore, whatever criticism there may be locally of that, it cannot be leveled at the British Waterways Board.
Perhaps I may turn to what the Board is doing at present. The Board's engineering consultants are examining carefully the structures of both bridges, and their reports are expected in a few weeks'

time. I gather that one of the causes for concern might be that the Board's people and the surveyors are not actually seen constantly working on the site. However, as with all these consultancy works, the consultants do their tests, make their measurements and then go away to do their calculations in their offices. I assure the hon. Gentleman—I hope that he will convey the assurance to his constituents—that the fact that surveyors and so on are not seen on the site for 24 hours a day does not mean that not much work is taking place or that the Board is not concerned.
I assure the hon. Gentleman that the Board is concerned about the difficulties which arise and the very proper desire of the people of Northwich to have this matter dealt with as speedily as possible. I understand that there are indications that extensive works will be required to both bridges—that is the first indication I have—in order to restore them to the fully satisfactory condition that is normal for two—way working. I am sorry to say that this will involve further traffic restrictions at both or either of the bridges.
I remind the hon. Gentleman that the Board cannot close bridges at will. It has to keep in close touch with the local highway authority, and that authority decides, in the light of its discussions, when and how traffic restrictions shall be imposed if they be needed. I think that I can give the assurance on behalf of the Board that it will be—as it says it always has been—keeping very closely in touch with the highway authority.
In my view the Board acted very responsibly and in the interests of road users as soon as it became aware of the condition of the bridges and the extent of the deterioration. It kept in close touch with the local authority, the Cheshire County Council Highway Authority, the district council and the police, and carried out emergency work as expeditiously as it could with a minimum of interference with traffic users. The Board called for a thorough engineering reappraisal of the condition of the two structures with a view to identifying and carrying out all the work now needing to be done to restore the bridges permanently to full strength. I believe that the Board is right to do the job properly even if it takes a little longer. The hon. Gentleman's constituents would have more cause


for complaint if there were any evidence that the Board was not applying its mind thoroughly to getting the job done satisfactorily in the interests of safety as well as in the interests of road traffic.
If the hon. Gentleman will think for a moment, he will realise that the suggestion that the Waterways Board should have a 24-hour maintenance service on these bridges is almost impossible to implement when one considers the extent of its responsibilities round the country. In suggesting that the Board should provide more resources the hon. Gentleman is really asking for an increase in subsidy to the British Waterways Board. I am sorry to tell the House that at the moment, anyway, the Board is not a nationalised industry which can be expected to make a profit. We have a very old and dilapidated canal system, as I have illustrated.
A little income comes from freight traffic but not much freight goes on canals at the moment. If more could be brought on to the canals, it would help. There is a little income from anglers. I am not sure how far the hon. Gentleman would carry us with him if he is suggesting that there should be an increase in fishing charges on the canals. There is also a little income from recreational boat users. So the scope for increasing the revenue of the BWB is limited. In 1975, out of a turnover of about £16 million to £17 million of the BWB budget, the subsidy from the Exchequer is something over £8 million, almost exactly one half, so the hon. Gentleman will see the difficulty.
I may add, since we are having consultants appointed by my predecessors in a previous Government to look into the whole question of the maintenance of the bridge work in the canal system, that the first reports are not reassuring. A great deal of work has to be done having regard to the age and deterioration of our canal system. It is a great problem for the BWB, which is constantly telling me that it needs more resources to deal with the problems that the hon. Gentleman has mentioned.
He mentioned two other matters. He asked me to say a word about the adequacy of the crossing over the River Weaver in the long and the short term. So

far as the short term is concerned, the town bridges are now fully operational and the Hayhurst Bridge is open to single-line traffic. BWB consultant engineers will report in a few weeks and the Board will then undertake what work is necessary to bring both bridges up to full standard. The local highway authority is content with these arrangements. If the townspeople of Northwich are not satisfied, their complaint lies against the authorities responsible for traffic management in the town, not with the BWB. I understand that the local police have not received any complaints, though I fully accept that the fact that the hon. Gentleman has raised the matter here today means that as an hon. Member he has done so. I will make sure that the points he has raised are conveyed to the BWB, which will communicate with him.
Let me add a word or two on the long-term position. The questions whether the present crossings of the Weaver Navigation are sufficient to cope with traffic in Northwich and whether a third crossing should be provided are for the highway authority, the Cheshire County Council. It must resolve them. They are not for my Department, and they are not the concern of the British Waterways Board. I personally readily accept the need for some improvement in the River Weaver crossings, having myself suffered delays in the past. But the mechanism for starting local transport projects of this nature is through the supplementary grants system. There are many compelling demands on highway authorities in present circumstances, and so far the Cheshire County Council has not found it possible to include this provision in the present TPP proposals.
The British Waterways Board is concerned about that area of its responsibility. It wishes to have good public relations with the people and the local authorities of Northwich. It is anxious at all times to enter into discussions with the local authorities and with the lion. Gentleman and to keep them fully appraised of what is going on. It is acting responsibly. It has called for the engineering consultants' report, which has been very thoroughly prepared. As I have said, regrettably it means that some very severe work has to be undertaken


which I am sure everyone will agree is essential having regard to the safety factors involved in these two bridges.
I hope that I have been able to give the hon. Gentleman some reassurance. If he feels that he needs more, I hope that he will allow me to put him in touch with the British Waterways Board, which

will be happy to give him any information that he requires and, I am certain, to convince him of its desire to maintain the fullest co-operative arrangements with him and his constituents.

Question put and agreed to.

Adjourned accordingly at three minutes to Ten o'clock.